Gazprom, CNPC agree basic terms of long-awaited gas deal | Reuters Russia's top gas producer Gazprom (GAZP.MM) and China's CNPC agreed on Thursday on basic terms of long-awaited gas supplies to China, paving the way for the final deal, which would cement Moscow's footing in the world's second largest economy. The pressure on Gazprom to venture into the Chinese market is rising as its Russian rivals, such as Novatek (NVTK.MM), have already secured deals to supply China with gas from yet-to-build liquefied gas plants and are lobbying for limiting Gazprom's export monopoly. ...The basic terms, signed by heads of Gazprom and CNPC in the presence of presidents Vladimir Putin and Xi Jinping "define the volumes, start of deliveries, payments, 'take-or-pay' amendment" and other issues, Gazprom said in a statement. It gave no further details. Gazprom first signed a memorandum of understanding with China in 2006 to ship up to 68 billion cubic meters of gas per year via two routes to the Asian country, later prioritizing the route which would take 38 bcm per year. However, talks on finalizing a deal have been repeatedly delayed over numerous differences, including pricing. Gazprom has said it aims to supply China with 38 bcm per year from its fields in East Siberia. That compares with 152 bcm it aims to supply to Europe this year.
Gazprom Refuses to Use U.S. Benchmark in China Gas Deal - Emerging Europe Real Time - WSJ Russian state gas firm OAO Gazprom said Thursday it had moved a step closer to making China its largest customer by persuading Beijing that prices shouldn't be linked to a hub based thousands of miles away in Louisiana. In a sign of the global reach of the shale-gas revolution that has propelled the U.S. ahead of Russia as the world's largest gas producer, China National Petroleum Corporation had wanted to link the price for the potential deal to the U.S. benchmark Henry Hub. New techniques have allowed producers in the U.S. to tap gas trapped in rock, creating a surge in volumes and driving the price lower at the Louisiana-based hub. Russia has been in negotiations with China for years on supplying gas, but talks have been hamstrung by disagreements over price. Gazprom and CNPC signed an agreement Thursday that set out almost all conditions for the deal, including the pipeline route and volumes for deliveries—just not the price.
China, Russia a Step Closer on Gas Supply-Caijing "The signing of the document, when price remains the only problem, signals the possibility of a breakthrough on the price negotiations." China and Russia's energy giants signed a framework agreement on Thursday on the Russian gas supply to China, making a leap forward in the decadelong gas negotiations. The agreement to export gas to China through the eastern pipeline was signed between China National Petroleum Corp and Russia's Gazprom in the Russian city of St. Petersburg. President Xi Jinping, who is there to attend the Group of 20 meeting, witnessed the signing ceremony with his Russian counterpart, Vladimir Putin, after meeting together....Under a memorandum of understanding the two energy giants signed in March, Russia will supply 38 billion cubic meters of gas to China annually from 2018. The volume is expected to increase to 60 billion cubic meters in following years. An energy expert who declined to be named said that although the framework agreement is not legally binding, "the signing of the document, when price remains the only problem, signals the possibility of a breakthrough on the price negotiations."