Gazprom, China move on gas talks

Source:Reuters Published: 2012-12-12 0:10:10

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.

Gazprom's statement 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 last-minute failure of a final deal in June 2011.

Gazprom had hoped to sell up to 68 billion cubic meters 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 have put China in competition with Europe for those gas supplies.

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

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

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

Gazprom 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.

 



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