China still stuck with Russia over gas price-report


Senior Member
Jan 17, 2010
China still stuck with Russia over gas price-report BEIJING, Feb 10 (Reuters) - China and Russia are still in protracted price negotiations for a tentative gas supply deal, the official China Daily reported on Wednesday, citing a Russian official.

The world's largest natural gas producer signed a gas supply agreement in October 2009 to supply 70 billion cubic metres of natural gas per year to China from Siberia and the Russian Far East, including Sakhalin.

Russian officials said earlier that gas deliveries could begin in 2014 or 2015, and that pricing issues could be decided at the start of 2010.

"The natural gas supply is still under discussion," the China Daily quoted Russia's trade representative in China, Sergey Tsyplakov, as saying. "The two sides are still negotiating prices before any major projects can be launched."

The report cited the official as saying that electrical products, timber, ferrous and nonferrous metals, instead of natural gas, were priorities for cooperation between China and Russia in 2010.

It has been more than three years since the two sides signed a preliminary gas deal. The latest pact last year did not resolved disagreements over pricing and conditions that have so far blocked concrete progress.

Chinese gas demand, although accounting for a small proportion of the country's total energy consumption, has been rising fast and shortages often emerge in cold winters.

Taking advantage of weaker global demand, China has since 2008 landed a series of liquefied natural gas (LNG) deals with exporters like Australia and Qatar, through long-term supply agreements with companies such as Shell (RDSa.L: ), ExxonMobil (XOM.N: ) and Total (TOTF.PA: ).

In mid-December, China and central Asian countries opened their first cross-border natural gas pipeline, able to pump up to 40 billion cubic metres of gas to China by 2012-13.

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