7 Sep 2022 10:06

Ruble and yuan to be used equally in gas settlements with China

VLADIVOSTOK. Sept 7 (Interfax) - The Russian ruble and Chinese yuan will be used equally in settlements for gas with China's CNPC, President Vladimir Putin said at the plenary session of the Eastern Economic Forum (EEF).

Gazprom and CNPC on Tuesday signed additional agreements to their long-term contract for gas supplies along the eastern route, stipulating the transition to settlements for Russian gas exports to China in the countries' national currencies, rubles and yuan.

"The new payment mechanism is a mutually beneficial, timely, reliable and practical solution. I believe that it will simplify settlements, become an excellent example for other companies and give additional momentum to the development of our economies," the Russian gas giant's CEO, Alexei Miller said.

Russia began supplying gas to China from the Chayanda field in Yakutia through the Power of Siberia pipeline at the end of 2019 and supplies are supposed to grow to 38 billion cubic meters per year over the first five years.

Gazprom exported 10.39 bcm of gas to China along this route in 2021, 390 mcm more than the contracted amount.

Buyers of Russian gas from "unfriendly countries" are supposed to pay for it by converting foreign currency into rubles and the buyer is considered to have met payment obligations only once this is done. Some gas supplies to Turkey are also being switched to ruble payments; Bloomberg reported that 25% of supplies might be paid for in rubles.