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Russia, China to sign 30-year gas deal by June 10 - deputy PM

31 May 2011 18:26 (UTC +04:00)

Baku-APA. Russia will finalize a 30-year deal with China by June 10 to supply a total of 68 billion cubic meters of gas annually, Deputy Prime Minister Igor Sechin said on Tuesday following the seventh round of the China-Russia energy negotiators’ meeting, APA reports quoting RIA Novosti.

"By June 10, Gazprom (Russia’s gas export monopoly) and Chinese CNPC (China National Petroleum Corporation) will finalize talks and prepare a commercial contract," Sechin, who oversees energy issues in the government, said after negotiations with his Chinese counterpart Wang Qishan, adding that the deal’s term would be at least 30 years.

So far the parties have failed to reach a final agreement on gas prices. Sechin said Gazprom plans to wrap up pricing talks on future gas supplies to Beijing in June, when Chinese President Hu Jintao is scheduled to visit an economic forum in St. Petersburg.

Under a draft accord, Russia would supply 30 bcm of gas per year through a western route from Siberia into northwestern China, and a further 38 bcm into northeastern China. Earlier, Gazprom was reported to begin delivering 30 bcm of gas per year to China from 2015.

Russia and China may also reach an agreement by the end of 2011 to build a joint oil refinery, China’s energy chief Liu Tienan said, adding that the countries planned to extend cooperation in retail oil products sales.

Russia and China moved closer to agreeing on the price of Moscow’s oil deliveries, Sechin said as Beijing repaid some of its debt to Russian companies.

In January, Russia’s Transneft and Rosneft started oil supplies to China via the East Siberia Pacific Ocean pipeline under a $22 billion deal but later said that CNPC underpaid for the crude supplies citing differences over tariffs. Transneft says China owes it around $250 million for Russian supplies.

Transneft representative Igor Dyomin said on Tuesday the Chinese party had paid about $33 million to Transneft on May 30 and about $45 million on May 31.

A Rosneft official said that Beijing had repaid a total of $117 million on Monday and Tuesday.

Russia does not consider Chinese companies as alternative to BP in an expired $16 billion share swap and shelf development deal with Russia’s oil major Rosneft, Sechin said.

"We did not receive such offers from our Chinese partners. This means that we do not consider them (as alternative partners)," Sechin told journalists.

The deal between BP and Rosneft collapsed earlier in May, and Rosneft now has to look for another partner to provide it with shelf technologies it lacks. Media reports have said Shell, Chevron, ExxonMobil, China National Petroleum Corp and Petrobras have approached Rosneft.