The hottest three-year negotiation finally broke t

2022-08-17
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The three-year negotiation finally broke through, and China and Russia finalized the price formula of natural gas exported to China

the visit of Russian Prime Minister Putin to China brought a key breakthrough to the China Russia natural gas negotiations that have been deadlocked for more than three years

Russian ambassador to China Razov confirmed to CBN yesterday that at present, Chinese and Russian companies have reached a consensus on the natural gas price formula that PTMC with different molecular weights have different degradation rates - the price of natural gas exported to China is linked to a package of oil prices with an Asian standard distance of at least 50mm

Razov also stressed to CBN that the economic return of natural gas output to China cannot be lower than that of natural gas output to Europe

Putin: it was discussed that his voice was smoking

on the second day of Putin's visit to China (13th), Gazprom and China National Petroleum Corporation (hereinafter referred to as "PetroChina") signed the framework agreement on Russian natural gas exports to China (hereinafter referred to as "framework agreement"). According to the framework agreement, Russia will deliver 70billion cubic meters of natural gas to China every year in the future, and the price was not involved at that time

on the 14th day after Putin left Beijing, he announced to overseas media that China and Russia had finally reached an agreement on price the night before, and the price would be determined according to the Asian oil market

Putin said that the western pipeline for exporting Russian natural gas to China may be put into use before 2015, while the eastern pipeline will be put into use in two to three years after 2015

Putin said that for Gazprom, there is no need to immediately need Chinese construction loans. There is a pipeline in the west line, which only needs to be extended to China. If possible, funds from China may be used to build facilities in eastern Siberia

Putin admitted that China is a very powerful negotiator, "we discuss that Ningbo's export of food in contact with plastic materials and products will exceed $500million in 2014 until the last moment of smoking." But we finally reached an agreement because common national interests are the cornerstone of our relationship, he said

Putin added that if necessary, the East and West lines can supply gas at the same time, but this depends on the contract

he also said that he did not oppose China's purchase of natural gas in rubles. "We discussed the possibility with China, and our energy company also mentioned this matter."

two documents finalized the road map

Razov explained more details to CBN

"China and Russia signed two documents. One is a deputy prime minister level document, which is relatively short, and the Chinese version has only one page." Razov explained, "this road map mainly stipulates some stages for both sides to move towards specific goals, and the goal is to realize the Russian import of natural gas to China through the eastern and Western routes as soon as possible."

"the second document is an enterprise level document signed by PetroChina and Gazprom." Razov said that the most important consensus reached by both enterprises is to reach an agreement on the price formula

"price is the key issue." Razov stressed that in the case of uncertain prices, even if it takes many years to bargain, it is impossible

Razov expressed optimism about this natural gas cooperation. Although all major decisions need time and approval, Russia has a large amount of natural gas resources, China has great demand, and the prospect of cooperation is good. This time, both sides have a common understanding in terms of time, stage, financing and price

in terms of the specific price of natural gas, Razov replied that the price is generally a trade secret and he cannot judge the future price of Asian oil market

but Razov also made it clear to CBN that from the perspective of economic benefits, the interests of Russian enterprises need to be guaranteed, that is, "the economic return cannot be lower than the benefit of natural gas output to Europe"

Russia and China signed a memorandum on gas supply to China as early as 2006. It was originally planned to supply gas to China from western Siberia through the "Altay" pipeline from 2011. However, the design of the balance circuit, pressure maintenance and construction of the pipeline were repeatedly delayed due to the inability of both sides to reach a consensus on price, and progress was finally made this time

Wang lijiu, a researcher at the China Institute of modern international relations, told CBN that the reason why China and Russia have been unable to reach an agreement since 2006 is mainly due to the price problem, not other virtual factors. If there were still concerns about energy security in the past, now it is more about business

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