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Russian gas supplies to China may be bigger than gas supplies to Europe - Gazprom CEO

November 09, 2014, 16:59 UTC+3
Gazprom does not consider a possible prepayment for financing of the Sila Sibiri project, the company’s CEO Alexei Miller also said
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© ITAR-TASS/Aleksandr Semenov

BEIJING, November 9. /TASS/. Gas supplies from Russia to China mid-term may be bigger than supplies to Europe, Gazprom’s CEO Alexei Miller said on Sunday while commenting on the bilateral documents signed between Russia and China.

Miller said the countries are signing a Memorandum on supplies of natural gas from Russia to China along the western route, and a frame agreement between Gazprom and CNPC on gas supplies along the western route.

“These documents first of all fix that the western route is a priority project of our gas cooperation,” he said.

On Sunday, Russia and China signed 17 more documents, which also refer to cooperation in the gas sector. Those are a memorandum on Russian gas supplies along the western route, a frame agreement on supplies of gas from Russia to China, a memorandum on mutual understanding between Gazprom and the China National Offshore Oil Corporation (CNOOC Group).

The Western Route means gas supplies to China from the fields in West Siberia. Direct supplies are due in 2019.

“These documents first of all fix that the western route is a priority project of our gas cooperation,” he said.

The documents outline terms and conditions of gas supplies to China: 30 bcm. The contract’s term is 30 years.

Besides, the countries have discussed further steps, like signing of a buy-sell agreement and of an intergovernmental agreement.

“Supplies will go from fields in West Siberia - the resource base we are using for supplies to Europe,” Miller said.

“In mid-term we have another route, which is being negotiated with China now - gas supplies by a pipeline from regions of the Far East,” he said.

“As we shall be increasing the supplies along the western route, in mid-term the supplies to China may be bigger than the export to Europe,” Gazprom’s head said.

Gazprom does not consider a possible prepayment for financing of the Sila Sibiri project, the company’s CEO Alexei Miller also said on Sunday.

“We had negotiations (with China) - as far as a prepayment is concerned; and a prepayment was an element of the talks on price,” he said. “But since we have agreed finally on the price, we do not consider as possible using a prepayment as a financial instrument for further lowering of the price.”

“We are not negotiating loans,” he said.

Russia’s gas monopoly Gazprom and china’s CNPC on May 21 signed a contract on gas supplies to China along the “eastern route” for the term of 30 years. The contract’s price will make $400 billion. By the Eastern Route, Russia will supply to China 38 bcm a year by the Sila Sibiri (Power of Siberia) gas pipeline.

The construction of the Power of Siberia gas pipeline was launched on September 1, 2014. It will have a leadaway pipe that will pump gas to China.

The China National Petroleum Corporation (CNPC) has purchased a 20%-stake in the YAMAL SPG project for the production of liquefied natural gas on the Yamal Peninsula in Russia’s north. The first stage is to be launched in 2017.

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