MOSCOW, June 11, 21:27 /ITAR-TASS/. Russia’s National Welfare Fund assets may be invested in the construction of a gas pipeline to China, Minister of Economic Development Alexei Ulyukayev said on Wednesday, June 11.

“This is probably not a net increase in the authorized capital of Gazprom but this may be a contribution to an SPV [special purpose vehicle] to be created by Gazprom,” he said.

National Welfare Fund’s assets can already be invested in preferred stock. “We have already made the decision to make a contribution to Russian Railways’ capital,” he added.

At the same time, Ulyukayev noted that “priority is debt instruments” but “acquisition of ownership rights is also a possibility”.

The minister said that the gas pipeline to China should be built within six years. “Naturally, the decision on funding should be adopted earlier. One way or another, it should be done this year,” he said.

On May 21, Gazprom and China National Petroleum Corporation (CNPC) signed a $400 billion U contract for the supply of Russian pipeline gas to China. Under the contract, Russia will supply 38 billion cubic meters of gas a year for 30 years.

CNPC is China’s largest petroleum company wholly-owned by the state and is one of the world's leading integrated oil and gas production companies.

In October 2009, Gazprom and CNPC inked the Framework Agreement on the major terms and conditions of natural gas supply from Russia to China. The Agreement stipulates annual exports of up to 68 billion cubic meters of gas to the Chinese market. In September 2010 the Extended Major Terms of natural gas supply from Russia to China were signed.

In March 2013, Gazprom and CNPC signed the Memorandum of Understanding for cooperation between the two companies in pipeline gas deliveries to China via the eastern route.

In September 2013, Gazprom and CNPC inked the Agreement on the major terms and conditions of pipeline gas supply from Russia to China via the eastern route.

No stagflation

Russia’s Minister of Economic Development Alexei Ulyukayev said on Wednesday he saw no signs of stagflation in the Russian economy.

“I think there is no stagflation, and the risks, thought existent, are not high,” he said, adding that the current inflation rate could not be described as high for the Russian economy. “This inflation level is not high for us. As a matter of fact, inflation is high but this level was preceded by a still higher one. That is why, this tendency is characterized by decreasing economic growth rates and inflations decrease rather than increase,” he stressed.

“Risks that we might have higher inflation than we are having now of have recently had accompanied by low economic growth rates do exist, but are not high, I think. It looks like inflation will go down,” he said.