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“As I previously said, there is no need in advance payment for implementing gas delivery to China. It may serve as a tool for cutting the price for the Chinese side in view of Russia’s levying of customs duties. The advance payment may be potentially beneficial for both sides. But there is nothing critical in using or not using the advance payment,” Medvedev said.
In May, Gazprom confirmed the advance payment agreement with China National Petroleum Company (CNPC) in the amount of $25 billion. The advance payment sum matches the previously announced cost of the construction of the Power of Siberia gas pipeline with the capacity of up to 38 billion cubic meters per year. Gazprom CEO Alexei Miller said earlier that the gas pipeline construction would be launched right after the contract signing. Gas should be sold first — Gazprom has always stuck to this formula in the construction of infrastructure facilities, Miller said.
Gazprom and CNPC signed on May 21 a contact on gas delivery to China. The total cost of Gazprom’s contract with China’s CNPC will amount $400 billion for 30 years.