Tuesday, November 30, 2010

Russia and China Working on Natural Gas Deal

Russia and China have are close to reaching an agreement on a natural gas supply deal, Milton Financials sources report Russian Prime Minister Vladimir Putin as having said recently.

Speaking after talks with his Chinese counterpart, Putin told reporters that while a final pricing agreement is not expected until next year negotiations between Russia’s Gazprom and China National Petroleum Corporation on the prospects of supplies of Russian natural gas to China are looking very positive.

Under the terms of an earlier agreement Russia is to supply China a total of 30 billion cubic meters of natural gas a year beginning in 2015 via the Altai gas pipeline, which joins Siberia and China's western border with Russia.

The two nations have been locked in the final supply price negotiations of the gas from 2006, with China demanding a lower price than that charged by Russia for supplying European countries

With the difference between what Russia is asking and what China is prepared to pay being around $100 per 1,000 cubic meters being the final hurdle, negotiations are expected to conclude by mid-2011.

Milton Financials data shows that economic ties between the two countries have significantly strengthened over the past year with mutual trade between Russia and China increasing by 56% in the first nine months, reaching $42 billion.

Russia also recently completed the Skovorodino-Daqing section of the East Siberia-Pacific Ocean oil pipeline that connects Skovorodino in the Amur region with Daqing in northeastern China and supply is expected to begin by early next year.

Milton Financials has learned that the two nations signed a total of 11 documents during Putin’s meeting with Wen, including an agreement to construct the third and fourth phases of the Tianwan nuclear power plant situated on the Yellow Sea coast. The Tianwan power plant currently consists of two reactor units each rated at 1,000 MW capacity, which were constructed by Russia's Atomstroyexport. The first reactor began full operations in 2006 and the second in 2007

No comments: