No Russia-China gas deal signing during Xi visit -Kremlin

Discussion in 'China' started by huaxia rox, Mar 26, 2013.

  1. huaxia rox

    huaxia rox Senior Member Senior Member

    Apr 4, 2011
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    UPDATE 1-No Russia-China gas deal signing during Xi visit -Kremlin | Reuters

    (Reuters) - Russian President Vladimir Putin's spokesman said on Thursday that no gas deal with China would be signed during a visit by Chinese President Xi Jinping that begins on Friday.

    "As far as I know there is no decisive document on gas yet, but contacts are being held based on a positive dynamic. There is no agreement on gas yet on the large list of documents (to be signed)," Dmitry Peskov told reporters.

    Gazprom, the world's largest natural gas producer, and China, the top energy consumer, have been in talks over gas supplies for years, but a deal has never materialised due to a differences, including pricing.

    The state-owned monopoly exporter aims to sign a contract this year to supply China with at least 38 billion cubic metres of gas a year from East Siberia via a pipeline which is yet to be build.

    A Russian gas industry source said the Chinese price position remained fixed at $250 per thousand cubic metres, while Gazprom's price demand hovered around $300, although its hand has been weakened by falling global prices in the wake of the U.S. shale revolution.

    Industry sources have also said that Gazprom is trying to negotiate a loan from China to fund construction of the pipeline, similar to a deal Rosneft secured in 2008.

    In 2008, Russia's top crude producer secured a $25 billion loans-for-oil deal to finance construction of the East Siberia-Pacific Ocean pipeline, which now supplies China and other Asian customers with crude.

    Gazprom exports the bulk of its gas via pipelines to Europe but aims to diversify its export markets and delivery channels, adding liquefied natural gas (LNG), which has a much more flexible market in terms of prices and destinations than traditional pipeline supplies.

    Earlier this month, Gazprom and China National Petroleum Corporation (CNPC) have discussed the possibility of supplying LNG to China from a planned plant near the Pacific port of Vladivostok.

    Russia and China are also negotiating an increase in oil supplies to Beijing.

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