December 11, 2012 / 9:21 AM / 5 years ago

UPDATE 2-Gazprom signals possible revival of talks with China

* China prefers gas from new East Siberia fields

* Gazprom says delivery from W. Siberia still in discussion

* Price stand-off unresolved

* Gazprom pursuing broader Asian strategy, including LNG (Adds comments from Gazprom spokesman paragraphs 4 and 5)

By Melissa Akin

MOSCOW, Dec 11 (Reuters) - Gazprom’s talks with China on supplying gas from eastern Siberia have moved “to a practical level”, the Russian gas export monopoly said, indicating it was seeking to revive the long-stalled negotiations.

The company’s statement on Tuesday, citing comments by Chief Executive Alexei Miller, showed it may expect some progress in the talks, which have involved little more than formalities since the failure of a final deal at the last minute in June 2011.

Gazprom hopes to sell up to 68 billion cubic metres of gas to China, not only from undeveloped new fields in eastern Siberia but also from its old core fields in western Siberia, which now supply European customers. That would put China in competition with Europe for those gas supplies.

A Gazprom spokesman said the western route was still on the table.

“We have always talked about two routes, but we were not prepared for a detailed discussion of the eastern route,” the spokesman said. “Now we are ready.”

Pricing has been the thorniest issue throughout the long history of the Russia-China gas talks.

Gazprom has argued it could get a higher price for the gas from its European customers than China was offering, but China has resisted its attempts to play the two markets off each other to get higher prices.

After talks with Chinese energy officials last week, Deputy Prime Minister Arkady Dvorkovich said he expected progress on both route and price.

Gazprom, worried about falling demand in Europe, has already committed to spending $38 billion to develop the eastern resources and build infrastructure to transport gas to Asian markets, a price tag seen as high by analysts.

It includes a plan to build a plant near Vladivostok to liquefy some of the gas and transport it by tanker to Asian customers, but analysts say a contract to sell gas by pipeline to China would be expensive and provide stable demand.

It plans total investments of 841 billion roubles ($27.4 billion) next year, down from 975 billion this year, Interfax reported on Tuesday, citing a source.

$1 = 30.7307 Russian roubles Reporting by Melissa Akin and Olesya Astakhova; Editing by Maria Kiselyova and Jane Baird

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