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China and Russia on natural gas import & Export negotiations had delay for a long time, but this year, China and Russia have continuous finalized things two linenatural gas pipeline, the previous negotiations for nearly twenty years failed to solve the problem.
In November 9th, President Xi Jinping met with Russian President Dmitry Putin,signed a series of bilateral cooperation agreement, China and Russia re signedenergy deals, western line natural gas pipeline landing, but the future things two line natural gas agreement shall start, China will become the biggest buyer ofRussian natural gas.
West contract finalized
Had previously been forecast will be formally signed in November this year, Sino Russian natural gas supply agreement was finalised as scheduled in the west.
According to the China petroleum and Natural Gas Corporation (hereinafter referred to as the oil) and Russia's Gazprom (hereinafter referred to as the Russian gas) agreement, Russia will from western Siberia through the Altaipipeline to supply additional 30000000000 cubic meters of natural gas to Chinaevery year, for a period of 30 years.
Gazprom CEO Miller said, according to the partial content in the oil group in the agreement, Russia may be in 4-6 years, began to supply gas to China.
According to Russian news release, the company and CNPC signed a framework agreement in the West China gas content, including air supply and supply of time limit and the clause "take or pay", and the place of delivery is the border between the two countries. Framework agreement also indicate the drafting on west linepurchase gas agreement, the technical agreement and inter governmental agreement schedule.
PetroChina site news release said, when the new signing a gas deal began operation, Chinese will surpass Germany to become Russia's largest natural gas customers.
Miller said, the medium-term prospects of the media, and a new route, is currently in talks with Chinese, from the Far East natural gas pipeline transportation. He also said, "the west" in the transport pipeline officially began supply, to Chinatransporting natural gas deliveries to Europe will be more than today, the volume of natural gas.
Earlier, in May 21st this year, the Russian gas and PetroChina signed Russia viaeastern China pipeline annual supply 38000000000 cubic meters of natural gas contract, the contract period of 30 years.
Industry analysts believe that this year the two countries signed, a succession ofnatural gas agreement, as a new natural gas supply channels open between Asia and Europe's two largest economy and has laid the foundation to reduce the price of natural gas in asia. Expected, the signing of the latest agreement will aggravatebetween multiple investment billions of dollars, according to the Asian marketnatural gas project competition.
On the same day, the Russian gas is a petroleum natural gas cooperationmemorandum of understanding and Chinese Offshore Oil Corporation signed thememorandum of understanding, but now belongs to the commercial secret.
Professor Lin Boqiang of Xiamen University China Center for energy economics research said that the first round of the agreement will make Russia economically and politically more dependent on china. China may be the world only a financial and market state can be stably consumption of Russia's energy export huge long-term. Putin will also have the opportunity to Europe and the United States to prove that Russia will not be isolated because Ukraine event.
The price problem to west route protocol for late check
Price has been a major obstacle to this long drawn out negotiations, and now the secret has not yet been opened.
It is worth noting that the reporter also sources from the Department was informed that the main reason of the price problem is also the second West later signedagreement, China since September 1st to upgrade the domestic natural gaswholesalers and non residents use natural gas prices, a move to the west lineprotocol successfully played a role.
Russian sources also corroborated this fact. The Russian Academy of SciencesResearch on the problem of oil and Gas Institute Vice Director Alexei Mastepanov thinks, "the west" has been the Russian Gas Industry Company priority projects,and Russia on gas supply agreement signed by the West late. The reason is thatChina's domestic market pricing conditions.
Maas Tepanov said that through the pipeline to China about West gas supplynegotiations are delayed, not because the oil will not buy high price of natural gas,but because of China's domestic market pricing is adjustable. China's domesticgas price restrictions lead to import natural gas prices higher than the sale price,and natural gas is imported to the high price.
Up to now, China and Russia have been made from the Russian gas includingWest and Eastern two schemes, West pipeline mainly use the resource base of Western Siberia, and Eastern involves natural fields in East Siberia, Far East andthe Sakhalin shelf. The west direction the supply of about 30000000000 cubic meters, east direction is about 38000000000 cubic meters, Russia next year totransport 68000000000 cubic meters of natural gas in china. The Eastern Pipelinesigned contracts worth $400000000000 in May of this year, China and Russiaafter the start of construction.
In respect of oil did not disclose the natural gas purchase and sale agreementsigned price, Gazprom has refused to disclose the price of natural gas in china.But after the eastern agreement signed, Russia has revealed that the total amount of the contract is $400000000000, the price of natural gas is likely to exceed $350per thousand cubic meters.
In November 10th, Miller had told the media that "West" is the preferred direction of natural gas in Russia cooperation. Russia's national energy security foundation President Konstantin Simonov stressed that "we have the advantage in thewestern region. Here we have to buy the China Central Asia natural gas. Natural gas prices, this price is equivalent to europe. Moreover, the transportation linehere is much shorter. Here the distance is about 2000 kilometers far from theborder. The eastern half of the distance less than".
In addition, according to the reporter, the west route protocol, the two sides haveagreed to take or pay clauses.
The so-called "take or pay", is a natural gas supply international practices and rules, refers to changes in the market situation, pay shall not be altered, with gasdid not reach this amount of users, must according to the amount of payment;supply side supply did not reach this amount, should make the correspondingcompensation to the user. If the user to extract in the year of natural gas is less than when the contract amount, may three years to fill raise.
Russian gas companies usually used in gas supply contract take or pay rules,therefore often accused of lacking flexibility. Recent years, with many Europeanconsumers through negotiation, cut take or pay gas. But in the future of China'snatural gas demand, take or pay should not become a problem.