* CNPC official says Ukraine not a factor in talks -
* Chinese sources say Beijing under no pressure to sign deal
* Citi believes deal is imminent, to be priced well for
(Adds details, quotes, analysts)
By Katya Golubkova and Chen Aizhu
MOSCOW, May 14 China and Russia's Gazprom
are making a final push to clinch a long-delayed
natural gas deal but have yet to iron out price differences, a
Beijing official said on Wednesday, ahead of next week's state
visit by Russian president Vladimir Putin.
Amid rising tensions with the West and a threat of deeper
sanctions in protest at Moscow's annexation of Crimea, Putin
could yet clinch the gas deal next week and reinforce his
repeated assertions that Russia wants to divert some oil and gas
flows from European markets towards growing Asian nations.
Gazprom generates about 80 percent of its revenue from gas
sales to Europe and has so far been only a marginal player in
Asia because of a lack of eastbound pipelines and its relatively
small liquefied natural gas (LNG) business.
Some analysts said they believe that a deal with China is
imminent and that the two countries have probably agreed a price
acceptable to both sides. However, failure to clinch a deal
would expose Russia's huge reliance on energy revenues from its
key Western buyers and probably strengthen Beijing's bargaining
positions in the months to come.
"Rumours that the Chinese side is trying to use the current
events in Ukraine to reduce the price for Russian gas are not
true," Russia's Interfax news agency quoted an official for
foreign relations from China's state-owned CNPC as saying.
"The heads of CNPC and Gazprom reached an agreement to sign
a contract during the visit of Russian President Vladimir Putin
to China in May. However for the contract to be signed, a price
for gas must be agreed."
CNPC could not be reached for a comment on Wednesday.
Gazprom began talks with CNPC to supply it with 38 billion
cubic metres (bcm) of gas a year - estimated to be worth about
$15 billion - more than a decade ago.
But the deal has been postponed repeatedly over price
disagreements, Beijing's desire to develop fields in Russia and
lately because of Moscow asking for dozens of billions of
dollars in advance.
Sources in Beijing have told Reuters that China remains
under no pressure to sign the deal as the prospects of cheaper
imposts have risen on the back of growing North American gas
exports and rising supplies from Turkmenistan.
China already imports about 20 bcm of gas from Turkmenistan,
accounting for about half of its total gas imports, and the two
countries signed an agreement last year to ramp up gas exports
to 65 bcm by 2020.
Furthermore, Putin's trip to China comes after a visit by
Turkmen President Gurbanguly Berdymukhamedov, with Chinese
President Xi Jinping pledging closer cooperation with the desert
China, the world's top energy consumer, has been asserting
its influence in resource-rich Central Asia, once Russia's
However, analysts from U.S. bank Citi said on
Wednesday that they believe the Russian gas deal will go ahead
because China needs a significant increase in gas use as a
primary source of energy to be able to tackle pollution from
"While Central Asian gas can meet its share of China's
increased gas imports, it is an imperfect substitute for Russian
gas, which would come from a different direction, serve a
different region of China, cross the border much closer to large
population centres and give China needed diversification of its
imported gas sources," Citi said.
Citi also said it believed that pricing for a deal is likely
be close to $11/mbtu - comparable to Russian gas prices for
Germany - and could even lead to an increase in Gazprom's
(Writing by Dmitry Zhdannikov; Editing by Elizabeth Piper and