2 Nov 2009 13:59

Gazprom, CNPC begin commercial talks on price of Russian gas deliveries to China

MOSCOW. Nov 2 (Interfax) - A Gazprom delegation led by Deputy CEO Alexander Medvedev held talks with China National Petroleum Corporation (CNPC) on Russian gas deliveries to China in Shanghai on Sunday and Monday.

The parties held detailed discussions on pricing, volumes, routes and the timeframe for the deliveries, Gazprom said in a press release.

Medvedev and CNPC Vice President Wang Dongjin agreed to set up an expert working group to discuss joint participation in projects to create gas chemical complexes in the Far East.

Negotiations on the key issues surrounding Russian gas deliveries to China and potential joint projects will resume at the end of 2009.

It was reported earlier that the framework agreement on Russian natural gas deliveries to China was signed in October. The document details the main provisions of the future contract. The deliveries will be made on two routes: up to 30 billion cubic meters on a western route and up to 38 bcm on an eastern route. The western route could be organized in the shortest possible time, since there are reserves of gas available, the infrastructure exists, and there is no need to create gas chemical and gas processing capacity. The document fixes the pricing to an oil basket index. One Russian official said the contract could be signed in June 2010 and actual deliveries could begin in 2014-2015.