Russia, China Sign 30-year Gas Deal

May 21, 2014

Russia and China agreed on a long-term gas supply contract in Shanghai on May 21, after years of talks on the deal, worth billions of dollars, RIA Novosti has reported.  Russian Energy Minister Alexander Novak and Director of the Chinese National Energy Administration Wu Xinxiong signed an intergovernmental memorandum on the mutual understanding in gas deliveries field through the eastern route.

Earlier today, Russia’s gas major Gazprom and the China National Petroleum Corporation (CNPC) signed a contract of purchase and sale of natural gas deliveries through eastern route, a RIA Novosti correspondent said.

Gazprom CEO Alexei Miller has refused to name the gas price for China, citing a “corporate secret.” The price could be estimated at around $350 per 1,000 cubic meters. Miller said the overall cost of the 30-year contract for Russian gas deliveries to China is $400 billion. According to Miller, only at 4 am local time it became clear “that all the principal issues have been solved.” Russia and China have foreseen providing “preferential tax regimes,” Miller told journalists, without giving details.

Gazprom’s stocks rose 0.9 percent following reports that the long-awaited gas supply contract was signed.

Copyright: RIA Novosti, 2014