The price of Russian natural gas for China under bilateral contract signed on Wednesday is based on the market price on oil and oil products, Russian President Vladimir Putin said.
Russian energy giant Gazprom and China National Petroleum Corporation signed a contract on Wednesday on Russia’s gas deliveries to China. The contract was signed in the presence of President Putin and his Chinese counterpart Xi Jinping.
Russian investments into the infrastructure for transporting gas to China, compressor stations will total $55 billion, according to Gazprom CEO Alexei Miller.
Russian gas supplies to China via the eastern route may begin in four to six years’ time, Energy Minister Aleksandr Novak told the media.
The gas price formula for China is developed similar to that for Europe, Russian President Vladimir Putin told reporters in this Chinese city on Wednesday. “The gas price formula as in other our contracts is pegged to the market price of oil and oil products,” Putin said.
“This is linked to it as a formula of computing the price for European consumers. This is a formula which is pegged to the market price of oil and oil products,” Putin said.
The Russian president called the reached agreements on Wednesday as the largest ever in the history of the Russian and Soviet natural gas sector.
He said it would take four years to implement the contract, while investments into the project would exceed $70 billion both from China and Russia.
Putin added that Russia and China began joint work on the development of the western route of natural gas supplies to China with possible diversification of the route.
The major contract signed on Wednesday was negotiated for several years. Gazprom expected to get $400 as a starting price for 1 thousand cu. m. of gas for China. The Chinese side wanted to buy gas for $350-360.
The price of Russian gas for China would be no less than $400 for 1,000 cubic meters, an expert of the Eurasian Development Research Center of the Chinese State Council said in April. Inclusive of infrastructure costs, supplies to China would cost no less than $400 for 1,000 cubic meters, given Russia’s export price of $380 for 1,000 cubic meters, he said.
Deputy Director of the Institute of Energy Strategy Alexei Belogoryev then estimated the contract price at $350-400 for 1,000 cubic meters. Director of the Energy Development Fund Sergei Pikin predicted a price of about $380.
[itar-tass.com]
21/5/14
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Related:
Russia and China agreed on a long-term gas supply contract in Shanghai on Wednesday, after years of talks on the deal, worth billions of dollars.....
ReplyDeleteRussian Energy Minister Alexander Novak and Director of the Chinese National Energy Administration Wu Xinxiong signed an intergovernmental memorandum on the mutual understanding in gas deliveries field through the eastern route.
Earlier today, Russia’s gas major Gazprom and the China National Petroleum Corporation (CNPC) signed a contract of purchase and sale of natural gas deliveries through eastern route, a RIA Novosti correspondent said.
Gazprom CEO Alexei Miller has refused to name the gas price for China, citing a “corporate secret.” The price could be estimated at around $350 per 1,000 cubic meters.
Miller said the overall cost of the 30-year contract for Russian gas deliveries to China is $400 billion.
According to Miller, only at 4 am local time it became clear “that all the principal issues have been solved.”
Russia and China have foreseen providing “preferential tax regimes,” Miller told journalists, without giving details.
Russia earlier suggested nullifying the extraction tax for gas fields delivering fuel to China, while Chinese officials expressed their readiness to cancel import taxes on gas from Russia, Rosneft CEO Igor Sechin said Tuesday.
Gazprom’s stocks rose 0.9 percent following reports that the long-awaited gas supply contract was signed. Russian stocks increased Tuesday amid positive aftermath of the first day of President Vladimir Putin’s visit to Shanghai.
In March 2013, Gazprom and CNPC signed a memorandum of understanding on the planned gas supplies to China along the eastern route via the Power of Siberia pipeline. The signing of the contract has been delayed several times as the two sides failed to reach an agreement citing a pricing issue as the main stumbling block. President Putin’s current visit to China became the final stage of the negotiating process.
The Gazprom CEO said earlier the company could receive advance payment from China for the gas, which could start flowing as early as 2018. The planned project has an estimated capacity to pump up to 38 billion cubic meters annually, which could later increase to 60 billion cubic meters.
http://en.ria.ru/russia/20140521/190004220/Russia-China-Ink-Historic-Gas-Supply-Deal.html
21/5/14
Implementation of gas contract with China to begin on May 22 - President Putin...
ReplyDeleteThe implementation of the gas contract with China will begin tomorrow and the parties are also beginning to work on the Western gas supply route, Russian President Vladimir Putin said. "The contract has been signed today and the work will begin tomorrow. Secondly, it makes it possible for us to begin the next project with our Chinese partners, namely, to begin working on the Western supply route," Putin told reporters in Shanghai on Wednesday, commenting on the historical gas contract signed with China.
Putin said he is referring to the supply of gas "from the Western Siberia resources."
Simultaneously, "it will make it possible for us to realize our plans to develop Russia's gas industry by connecting the eastern and western parts of extraction with the appropriate infrastructure."
"If need be, supplies can be diversified from the west to the east and from the east to the west," he said.
The price of Russian gas supplies for China under a contract between Russia’s Gazprom and China’s CNPC is tied to market prices for crude and petrochemicals and suits both sides, Russian President Vladimir Putin said on Wednesday..............Read more: http://voiceofrussia.com/news/2014_05_21/Implementation-of-gas-contract-with-China-to-begin-on-May-22-President-Putin-0435/
21/5/14
Russia's President Vladimir Putin has signed a multi-billion dollar, 30-year gas deal with China....
ReplyDeleteThe deal between Russia's Gazprom and China National Petroleum Corp (CNPC) has been 10 years in the making.
Russia has been keen to find an alternative energy market for its gas as it faces the possibility of European sanctions over the crisis in Ukraine.
No official price has been given but it is estimated to be worth over $400bn.
President Putin said in a statement to the Russian news channel Rossiya: "The price is satisfactory for both sides.
"It is tied, like it is envisaged in all our international contracts with Western partners, specifically our partners in Western Europe, to the market price on oil and oil products. It is an absolutely calibrated, general formula for pricing." ..............http://www.bbc.com/news/business-27503017
21/5/14