Gazprom, China Renew Gas Supply Talks

MOSCOW, December 5 (RIA Novosti) – Russian gas monopoly Gazprom is restarting gas supply talks with China on Wednesday as a high-level Chinese delegation led by Prime Minister Wen Jiabao arrives in Russia to discuss bilateral economic cooperation.

Talks over what would be a massive energy deal between Russia and energy-hungry China have been going on since the two sides signed a framework agreement in 2009.

Under the deal, Gazprom would deliver up to 68 billion cubic meters of gas to China for 30 years but the price of the gas supplied has been a major stumbling block preventing both sides from signing a final agreement.

China wants to pay $250 per 1,000 cubic meters; while Moscow does not want the price to be lower than that it set for its European customers. Ukraine, for instance, will have to pay about $432 per 1,000 cubic meters of gas in the fourth quarter of this year. China is reluctant to pay more than it does for gas from Central Asia.

China has been importing cheap Turkmen gas since 2009 when Turkmenistan, which has the world’s fourth largest gas reserves, opened the gas pipeline linking it with China’s northwestern Xinjiang province. The Central Asian pipeline network spans around 2,000 km (1,250 miles) from Turkmenistan, Uzbekistan and Kazakhstan before reaching China.

In late 2011, China signed a further deal with Turkmenistan, under which the Central Asian republic may sell an additional 20 billion cubic meters a year of gas, or 50 percent more compared with the 40 billion cu m volume it plans to supply by 2015.


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