Russia to build two gas pipelines to China: Hu, Putin agree to expand energy ties
BEIJING, March 21: China and Russia agreed on Tuesday to build two major gas pipelines and broaden their links in other energy sectors, during Russian President Vladimir Putin’s first day of a visit to Beijing. The gas pipelines, which are each envisaged to supply China with 30 to 40 billion cubic metres of gas annually, would be operational in five years, the head of Russian gas giant Gazprom told reporters.
“Today in fact we have determined the timeframe and the scale,” said Gazprom chief executive Alexei Miller. “We are talking about large-scale deliveries (of gas).”
One of the pipelines would be around 3,000kms long and approach from Russian territory to the west of China while the other, which would come at a second stage, would enter from the east.
Pricing formulas had yet to be worked out in detail, but the two countries were in the commercial phase of discussions on ‘conditions for purchase on the basis of world prices’, Mr Miller said.
The deal between Gazprom and China’s biggest energy firm, China National Petroleum Corp (CNPC), was one of 15 agreements signed on the first day of Mr Putin’s two-day visit.
With Russia the world’s second biggest oil exporter and China the second biggest consumer, energy was always going to be high on the agenda during Mr Putin’s visit and three of the other agreements also focused on that issue.
“The two sides will implement strategic diversification in the energy sphere,” Mr Putin and Mr Hu said in a joint declaration after meeting at the Great Hall of the People.
Of the other energy agreements, one was between Russian state-owned oil firm Rosneft and CNPC to ‘deepen cooperation’ in the oil sector.
Another was a feasibility study between state energy firms from both countries to look at delivering electricity from Russia to China.
However, on one of the issues of biggest concern for China — a pipeline to deliver oil from Russia — there appeared to be no major move forward.
The fourth energy deal was a ‘protocol’ agreement between Russia’s state-owned oil pipeline monopoly, Transneft, and CNPC.
Russian Industry and Energy Minister Viktor Khristenko said it was premature to say if or when the pipeline would be constructed.
“The answer to this question will come after the completion of the feasibility study,” Mr Khristenko said.
He said China would open a line of credit to finance the first phase of this study but made clear that many unresolved issues lay ahead.
The joint declaration by Mr Hu and Mr Putin touched on pipeline projects but did not go into specifics.
“Energy leaders and companies of the two countries will continue active work on establishing pipeline projects for delivery of crude oil and natural gas from Russia to China,” it said.
Russia plans to deliver 15 million tons of crude to China by rail this year, 25 per cent more than last year.
However, China is counting on the pipeline, which would be a branch heading south from a planned Siberia-Pacific project due to start construction this year, to deliver far more oil to feed its fast-growing economy.
BEIJING, March 21: China and Russia agreed on Tuesday to build two major gas pipelines and broaden their links in other energy sectors, during Russian President Vladimir Putin’s first day of a visit to Beijing. The gas pipelines, which are each envisaged to supply China with 30 to 40 billion cubic metres of gas annually, would be operational in five years, the head of Russian gas giant Gazprom told reporters.
