China gas agreement to turn on the taps
Published: 13 October, 2009, 13:03
Edited: 03 February, 2010, 12:23
TAGS: Investment, Regional development, Russia and the global economy, Gas
Gazprom CEO, Alexei Miller, has announced that China and Russia have agreed on ramping up gas supplies to the booming Asian economic powerhouse.
Speaking with journalists in Beijing, Miller said that an agreement had been initialed between Gazprom and the China National petroleum Corporation, with a signing by the Russian Prime Minister, Vladimir Putin, and his chinese counterpart, Wen Jiabao, to take place later on Tuesday.
"The frame agreement on the main terms for gas supply to China has been initialed and it will be signed on Tuesday in the presence of the Russian and Chinese prime ministers,"
The agreement will see an estimated 70 billion cubic metres (bcm) delivered to china via two routes, with 30 bcm coming via a western route sourced in Western Siberia, and a further 30 bcm coming via an eastern route, sourced in East Siberia, the Russian Far East and Sakhalin.
Miller said final pricing details would be outlined in the final contract, with pricing to be linked to gas prices for Europe. The Gazprom CEO did not state when the first deliveries would be made, but indicated that the western route would be operational first with existing infrastructure used.
Speaking with Business RT, Mikhail Krutikhin, partner and analyst with independent consultants RusEnergy, said the key issues of pricing and contract volumes remain ahead, and that the announcement, although potentially positive, follows in the wake of a range of similar agreements which have faltered.
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While the EU are busy looking for alternate gas supply to Russia, Russia seems to be finding alternate customers. At this point the EU should shelf ita politics and assist Russia in developing another supply route bypassing the Ukraine, because China will and can absolve all the energy it can lay its hands on, not only Russian but even the alternative source the EU is so busy looking for. If they do not hold to what they have, they may end up with nothing.
Great stuff, more of it please, I love the free market, the more customers we have to suppl the better and China should be one of our preferred customers just like Germany, Italy and France... And then bring on the LNG. The timing is great and will create good competition. It is a shrewd move to develop and protect the business we are in already. Russia has been a very reliable supplier of gas until the US political directives came in. China, Germany Italy and France are strong enough to be free from the US mandate.
Some European Masters,cannot ever stop complaining,when it comes to Russian gas,be its delivery,or price,they love to charge for,but to their dismay,MUST pay for,and that is bad.The Russian Leaders and its people understand,as some of us do,these same MASTERS expected to have the Russian gas,and all their resources on their hands,with the fall of the Soviet Union,and when they see,the Russians demand more money for their resources,apparently some become very upset,and can't control their emotions.They are paying for it now,but the dream for FREE Russian Resources did not die,and that lead too,this Nation being encircled,with American bases on their borders,and the war on terror being fought,against terrorists they accuse,when in fact it is proven,the 9/11was an inside job. I am sure the Russians and others of the Region are watching every move.