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Russia, China sign agreement on cooperation in Russian gas supplies via ‘eastern route’

October 13, 2014, 15:46 UTC+3
Under the 40-year agreement, the sides will provide assistance to Russian gas supplies to China in the sphere of engineering, construction and operation of the gas pipeline infrastructure
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Chinese Prime Minister Li Keqiang (L) and Russian Prime Minister Dmitry Medvedev (R)

Chinese Prime Minister Li Keqiang (L) and Russian Prime Minister Dmitry Medvedev (R)

© Dmitry Astakhov/TASS

MOSCOW, October 13. /TASS/. Russia and China have signed an agreement on Monday on cooperation in the sphere of Russian natural gas supplies via the Power of Siberia gas pipeline, the so-called “eastern route.”

The document was signed at the meeting between Russian Prime Minister Dmitry Medvedev and his Chinese counterpart Li Keqiang in Moscow.

Under the 40-year agreement, the sides will provide assistance to Russian gas supplies to China in the sphere of engineering, construction and operation of the gas pipeline infrastructure.

Russia’s Gazprom and China National Petroleum Corporation (CNPC) have also signed a technical appendix to the agreement. After the agreement expires, it is due to be automatically extended for another 5-year period.

The document specifies the terms of passage for the personnel and equipment through the Russian-Chinese state border and the customs formalities in transporting vehicles and construction materials.

The agreement is a key condition for the landmark deal reached between Gazprom and CNPC in May to enter into force.

Natural gas supplies to China

Russia’s gas producer Gazprom and CNPC agreed in May that Russia will supply China with 38 billion cubic meters of gas starting from 2018-2019. The deal now needs to be signed by both governments. According to a Russian government document, the agreement between the Chinese and Russian governments is a condition under which the deal, signed in May, can come into force.

Infographics Supplies of Russian natural gas to China Supplies of Russian natural gas to China
May 21, 2014, Gazprom and CNPC have signed a deal on gas supplies to China

“Energy remains the driver of economic cooperation between Russia and China,” the government source said. “Our countries are consistently moving towards forming a strategic energy alliance.”

Natural gas will be supplied to China via the east-bound Power of Siberia pipeline, the construction of which was launched by President Vladimir Putin on September 1.

Gazprom said it is capable of more than doubling natural gas supplies to China to 100 billion cubic meters annually, including via the western route connecting fields in Western Siberia with north-west China through the Altai republic.

Power of Siberia

The Power of Siberia gas pipeline, estimated at $21.3 billion, is intended to pump 61 billion cubic meters of natural gas to the Russian Far East and China annually and will stretch over a distance of 3,968 km (2,465 miles). The first supplies could start in 2018-2019.

The pipeline is designed to pump natural gas from the giant Chayanda oil and gas condensate deposit in Yakutia in north-east Russia and the Kovykta gas condensate field in the Irkutsk Region in Eastern Siberia.

The Chayanda field is expected to produce up to 25 billion cubic meters of natural gas and at least 1.5 million tons of oil annually.

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