Russia, China may reach basic gas supply deal by end March: report
Moscow (Platts)--25Feb2013/520 am EST/1020 GMT
Russia and China may reach a basic agreement on the supply of Russian
gas to the Asian giant by the end of March -- in time for the visit to Moscow
by Xi Jinping, secretary general of the Communist Party of China -- Russia's
deputy prime minister Arkady Dvorkovich said Monday, according to Russian
news agency Prime.
"[Russia's] Gazprom and the Chinese partners are in active consultations
and talks over gas supply conditions and expect to reach the basic agreement
by end March," Dvorkovich said on the sidelines of the Chinese-Russian energy
cooperation commission meeting in Beijing, according to the report.
Contractual terms for the supply of gas may be finalized within several
months, Dvorkovich was cited as saying.
In 2006, Moscow and Beijing signed an initial agreement for the supply
of up to 68 billion cubic meters/year of gas, and agreed to build two gas
pipelines -- the western route dubbed Altai and the eastern route.
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In September 2010, Russia's state-owned Gazprom and China National
Petroleum Corporation signed a legally binding agreement on the supply of up
to 30 Bcm/year of Russian gas to China via the western route. At the time,
both sides were hoping to reach an agreement on the gas price by the middle
of 2011 and sign a commercial contract by July that year, with supplies
starting in 2015.
"There is every opportunity to reach concrete agreements on expanded gas
supplies through different routes, first of all via the so-called eastern
route," Dvorkovich was quoted as saying Monday.
In December 2012, Gazprom CEO Alexei Miller said the company had
restarted talks with China over gas supplies via the eastern route, which he
said might be higher than the 38 Bcm/year that was agreed upon earlier.
PROGRESS IN CRUDE SUPPLY TALKS
Russia and China may also reach a concrete agreement on the additional
supply of Russian crude to China by the end of March, including supply to the
Tianjin refinery project, Dvorkovich was cited as saying.
Russia's state-owned Rosneft and China's CNPC signed an agreement in
September 2010 to conduct a front-end engineering design study for a 260,000
b/d refinery in Tianjin, on China's eastern coast. Construction had been
expected to start by 2015, but the project has stalled over concerns of its
Last week, Rosneft said it had reached "a mutual understanding"
with China's Sinopec to significantly boost crude supplies to China.
Rosneft and Russia's national oil pipeline operator Transneft currently
send 15 million mt/year (300,000 b/d) of crude to China via an offshoot of
the ESPO crude pipeline from Skovorodino in Russia's Far East, under a
20-year contract with CNPC. The deliveries started in January 2011.
--Dina Khrennikova, firstname.lastname@example.org
--Edited by Deepa Vijiyasingam, email@example.com