UPDATE 1-No Russia-China gas deal signing during Xi visit -Kremlin

Thu Mar 21, 2013 1:25pm EDT

By Alexei Anishchuk

NOVO-OGARYOVO, March 21 (Reuters) - Russian President Vladimir Putin's spokesman said on Thursday that no gas deal with China would be signed during a visit by Chinese President Xi Jinping that begins on Friday.

"As far as I know there is no decisive document on gas yet, but contacts are being held based on a positive dynamic. There is no agreement on gas yet on the large list of documents (to be signed)," Dmitry Peskov told reporters.

Gazprom, the world's largest natural gas producer, and China, the top energy consumer, have been in talks over gas supplies for years, but a deal has never materialised due to a differences, including pricing.

The state-owned monopoly exporter aims to sign a contract this year to supply China with at least 38 billion cubic metres of gas a year from East Siberia via a pipeline which is yet to be build.

A Russian gas industry source said the Chinese price position remained fixed at $250 per thousand cubic metres, while Gazprom's price demand hovered around $300, although its hand has been weakened by falling global prices in the wake of the U.S. shale revolution.

Industry sources have also said that Gazprom is trying to negotiate a loan from China to fund construction of the pipeline, similar to a deal Rosneft secured in 2008.

In 2008, Russia's top crude producer secured a $25 billion loans-for-oil deal to finance construction of the East Siberia-Pacific Ocean pipeline, which now supplies China and other Asian customers with crude.

Gazprom exports the bulk of its gas via pipelines to Europe but aims to diversify its export markets and delivery channels, adding liquefied natural gas (LNG), which has a much more flexible market in terms of prices and destinations than traditional pipeline supplies.

Earlier this month, Gazprom and China National Petroleum Corporation (CNPC) have discussed the possibility of supplying LNG to China from a planned plant near the Pacific port of Vladivostok.

Russia and China are also negotiating an increase in oil supplies to Beijing.

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Comments (1)
kafantaris wrote:
Far from creating a new world order, Russia and China have in fact perpetuated the old disorder. The best example of this is Syria. When other nations came together and tried to bring a peaceful resolution to Syria it was Russia and China — and on three separate occasions — that blocked them. Not because Russia and China had better ideas but because it looked like regime change for Syria — something they feared happening in their own countries. Why would they help topple Assad if their own regimes are no better, and Assad’s downfall might encourage their own?
Conveniently Russia and China lifted not a finger to sort things out in Syria. Moreover, they have rendered the rest of the nations impotent of doing anything as well.
Meanwhile the Syrian people suffered greatly and thousands died as their country descended into the depths of civil war. All along we continue to watch helplessly from the sidelines.
If this is Mr. Putin’s idea of new world order, we want no part of it. As for China, it is now intertwined with the economic interests of the nations of the world, and can no longer afford to keep in lockstep with the stagnating Russia.

Mar 22, 2013 4:35am EDT  --  Report as abuse
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