December 17, 2013 / 11:41 AM / 5 years ago

UPDATE 1-Gazprom may sign gas contract with China by end of January - report

MOSCOW, Dec 17 (Reuters) - Gazprom, the world’s top gas producer, could sign a contract to supply natural gas to China at the end of January, Chief Executive Alexei Miller was quoted as saying by Interfax news agency on Tuesday.

In September, Gazprom and Chinese counterpart CNPC agreed on the basic terms of an agreement, including volumes, when deliveries should start, payment, a ‘take-or-pay’ amendment, but the failed to secure a price deal.

Gazprom had planned to ship 38 billion cubic metres of gas to China annually from 2018 from a yet-to-be-built pipeline. They had promised to reach a final deal by the end of this calendar year.

Asked on Tuesday if there was a chance the deal could be signed by Chinese New Year (Jan 31, 2014), Miller said, according to Interfax: “Definitely. The contract is in a high stage of preparedness, we have to agree on a basic price only.”

Gazprom has been in talks with Beijing for years as it seeks to diversify its customers away from Europe, but China, the world’s top energy user, has proved to be a tough negotiator, demanding a steep discount to prices paid by Western utilities.

Local media reported on Tuesday that Gazprom has not included funding for the construction of a gas pipeline to China and the development of a gas field to supply it in its initial 2014 investment programme žbecause the company had so far failed to reach a pricing agreement with Beijing.

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