Russia, China set gas price for potential deal: paper

PanARMENIAN.Net - The final price for Russian gas under a potential new deal with China will be set at $350-380 per thousand cubic meters, Russia's Izvestia newspaper reported Monday, May 19, citing a source in energy giant Gazprom.

“Despite the predictions that China will receive considerable discounts, the final price for gas will be ‘around average European,’ which means approximately $350-380 per thousand cubic meters,” the source told Izvestia, according to RIA Novosti.

The newspaper said Gazprom head Alexei Miller must “negotiate only one figure,” which is expected to be settled on Monday during talks with his counterpart in Chinese energy giant China National Petroleum Corporation.

The source also revealed that Rosneft Head Igor Sechin will join the Russian delegation in China, while his company prepares a number of contracts for Russian President Vladimir Putin’s visit to Shanghai Tuesday.

“The Rosneft leadership is going there to discuss the possibility of participation of Chinese companies [CNPC, Sinopec] in exploitation of continental and shelf deposits of Rosneft as well as projects on oil refining,” the source was quoted as saying.

Putin will visit China on Tuesday to cement economic ties between the two countries, including on energy. During the visit, Gazprom and CNPC could agree on long-term gas supplies and increasing oil supplies.

In the context of the current political standoff between Moscow and Brussels over the Ukrainian crisis and EU plans to decrease its dependence on Russian gas supplies, experts earlier predicted Gazprom could offer China a significant discount to sign a long-awaited deal.

In March 2013, Gazprom and CNPC signed a memorandum of understanding on Russian gas supplies to China along the so-called eastern route via the Power of Siberia pipeline.

Gazprom CEO Miller said the company could receive advance payment from China for the gas, which could start flowing as early as 2018. The project has been estimated to pump up to 38 billion cubic meters annually, which could later increase to 60 billion cubic meters.