Gazprom postpones construction of pipeline to China - report
MOSCOW, Sept 4
MOSCOW, Sept 4 (Reuters) - Russia's state-owned gas producer Gazprom has postponed construction of a pipeline to China until next year, the Vedomosti newspaper reported on Wednesday, as Moscow and Beijing have failed so far to agree terms on pricing.
The delay is an embarrassing setback for Russian President Vladimir Putin, who has urged Russian companies to expand their reach in the lucrative energy markets of Asia, and comes just after the former Soviet republic of Turkmenistan agreed to increase its gas supplies to China.
The delay is also a blow for Gazprom, which has been in talks for years over gas supplies to energy-hungry China, seen as a major market for Russian gas, which is sold primarily to Europe.
Moscow is seeking to diversify its gas sales away from cash-strapped Europe, where Gazprom covers a quarter of gas needs, and which is in turn trying to secure other sources of fuel to lessen its energy dependence on its former cold war foe.
Vedomosti reported construction of the pipeline would be started in the first quarter of 2014 rather than this November. It said the pipeline, known in Russian as Sila Sibiri (the Power of Siberia), was estimated to cost $38 billion and was designed to carry gas to Russia's Pacific coast to feed a new liquefaction plant at Vladivostok.
A spokesman for Gazprom declined to comment.
Gazprom has said it plans to secure a pricing agreement on sales of 38 billion cubic metres (bcm) of gas to China annually by the end of the year. That compares with the 152 bcm it aims to sell to European Union and Turkey this year. (Reporting by Vladimir Soldatkin; Editing by Mark Potter)
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