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Gazprom and CNPC to start commercial negotiations on gas supplies from Russia

MOSCOW, February 15. /TASS/. Chairman of Gazprom’s management committee Alexey Miller and Chairman of China National Petroleum Corporation (CNPC) Wang Yilin have met to discuss the implementation of the project on gas supplies from Russia to China via the so-called ‘eastern route’, as well as the prospects of supplies via the ‘western route’ and from Russia’s Far East, Gazprom reported.

The sides agreed to shift to the stage of commercial negotiations regarding the project, the report said. The sides summed up the results of development of technical issues and reached an agreement to shift to the stage of commercial talks on the project, Gazprom said.

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Gazprom chairman says gas will follow oil in global energy balance by 2040

The Power of Siberia natural gas pipeline is being constructed as per schedule, the company said.

Currently, Gazprom is building the Power of Siberia gas pipeline, which will pump natural gas from the giant Chayanda oil and gas condensate deposit in Yakutia and the Kovykta gas condensate field in the Irkutsk Region in Eastern Siberia to deliver gas to the domestic market (via Khabarovsk to Vladivostok) and further on for exports to China. The pipe's section aimed for China will be built near Blagoveshchensk. The eastern route stipulates the supply of 38 billion cubic meters of natural gas to China annually within 30 years.

Gazprom investments in the Power of Siberia pipeline in 2017 increased to 158.811 billion rubles ($2.7 bln) from 76.162 billion rubles ($1.3 bln).

The terms of the partnership in design, construction and operation of the cross-border zones of the gas pipeline are defined by an intergovernmental agreement dated October 13, 2014

In 2015, Gazprom and CNPC signed an agreement on the basic conditions of pipeline gas deliveries from Western Siberia to China via the "Western" route (Power of Siberia-2 pipeline). Initially supplies are envisaged at 30 billion cubic meters of gas per year.

Also in 2015 Gazprom and CNPC signed a memorandum of understanding on the project of pipeline shipments of natural gas to China from Russia’s Far East.

On June 25, 2016, Gazprom and CNPC signed a memorandum of understanding on gas storage and power generation in China.

Previously, Gazprom CEO Alexei Miller said that the contract for the supply of Russian gas to China through the Power of Siberia pipeline came into force in May 2015. The supplies will start in 4 to 6 years after the contract’s entry into effect. Accordingly, the gas deliveries to China may start in the period from May 2019 on May 2021.

China Petroleum Engineering & Construction Corporation (affiliated with CNPC) may also become one of contractors in the Amur Gas Process Plant construction:

Alexey Miller and Wang Yilin met earlier on Wednesday to discuss the implementation of the project on the Amur Gas Process Plant construction. The sides completed the talks on the participation of China Petroleum Engineering & Construction Corporation in the project under the terms of an EPC (engineering, procurement, and construction) contract, according to Gazprom.

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