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Russia and China drawing closer to historic natural gas agreement

10th April 2014

Both sides are hopeful that a final agreement on a Russia-China gas pipeline could be reached within the next month.

Russia and China drawing closer to historic natural gas agreement
Russia and China drawing closer to historic natural gas agreement

CNPC executives have met with two major Russian oil and gas firms this week to discuss increased cooperation and trade between the two countries, especially in regard to natural gas agreements.

CNPC chairman Zhou Jiping met with Gennady Timchenko, non-executive director of Novatek, in Beijing on Tuesday. They exchanged positive views on issues relevant to the engineering, procurement and construction, project management, LNG purchase and sale, and the financing of the Yamal project.

Jiping met with with Gazprom chairman of Gazprom Management Committee Alexey Miller the next day. They spoke highly of the significance of the Eastern Route of the proposed Russia-China Gas Pipeline in energy cooperation between the two countries.

According to CNPC: “The two companies showed constructive attitudes in negotiating the Eastern Route project. Consensus in the technical terms has been reached between CNPC and Gazprom, while the business negotiation is ongoing. The two Chairmen also expressed their wish to see the signing of a gas purchases and sales contract via the Eastern Route before long.”

CNPC vice-president Wang Dongjin, PetroChina vice-president Huang Weihe, and CNPC deputy chief-economist Wang Lihua were present at the meetings.

Russian reliance on a European market to buy its huge reserves of natural gas has been shaken by the crisis in Ukraine.

Deputy prime minister Arkady Dvorkovich is currently in Beijing discussing trade agreements with his Chinese counterparts. He is reported to have confirmed that a final agreement on gas sharing would be reached by the end of next month, and that only the base price was left to agree.

Premier Vladimir Putin will be visiting Beijing next month with the intention of bringing negotions to a close and signing an agreement.

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