Transneft hopes China will pay debts in 2-3 weeks

NOYABRSK, October 25 (RIA Novosti) – Russia’s Transneft oil pipeline monopoly hopes that China will redeem its debt for delivered oil within two to three weeks, company head Nikolai Tokarev told reporters on Tuesday.

“We have a pre-agreed position approved by high-ranking participants of the last visit,” he said referring to a recent visit of a Russian delegation to China. “I am sure that we will close this issue within 2-3 weeks.”

A source close to the situation has said China’s debt to Transneft amounted to $40.5 million as of the beginning of September. In mid-October, Deputy Prime Minister Igor Sechin said the parties had settled all disagreements on the accumulated debt and the price formula.

“We have found parameters of solutions which satisfy both sides. China is committed to repaying its debt, including penalties and interest. Russian experts are working on adapting pricing parameters to market conditions,” Tokarev said, without disclosing details of the decisions.

In January, Transneft and Russian oil giant Rosneft started crude supplies to China through the Eastern Siberia Pacific Ocean (ESPO) pipeline under a $22-billion deal but later said that China National Petroleum Corporation had underpaid for the crude supplies and unilaterally cut payments by seven percent.

China repaid some of the debt in June, but later cut payments again. Russia has threatened to take the matter to court.

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