Documents signed to advance Russian-Chinese cooperation in underground gas storage, power generation, and road infrastructure

RELEASE

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Wang Yilin, Chairman of the Board of Directors of CNPC, took place today in Beijing.

The parties addressed current issues related to strategic cooperation, noting in particular that the project for Russian gas deliveries to China via the eastern route was right on schedule. On May 11, 2017, a temporary two-way checkpoint had become operational on the Russian-Chinese border for the construction of the Power of Siberia gas pipeline’s crossing under the Amur River. The parties began to discuss the exact starting dates for gas supplies via Power of Siberia under the existing contract.

The parties touched on the project for gas deliveries from Russia’s Far East in the context of the commercial negotiations launched with the view of reaching an agreement on the supply terms by late 2017.

Following the meeting, three contracts were signed in the presence of Alexey Miller and Wang Yilin to conduct pre-development surveys for the purposes of creating underground gas storage (UGS) facilities within the Shenzhen 2–1 gas deposit (Heilongjiang province), Baiju aquifers (Jiangsu province), and Chuzhou salt caverns (Jiangsu province). The documents had been prepared as a follow-up to the Agreement inked in February 2017 between Gazprom and CNPC to conduct geotechnical surveys for the creation of UGS facilities.

The Langfang branch of the PetroChina Research Institute of Petroleum Exploration and Development acts as the customer for the pre-development surveys. The contractor for the first two contracts is Gazprom VNIIGAZ, while Gazprom Geotechnology acts as the contractor for the third contract. Pursuant to the contracts, the Russian companies are to develop key technological solutions for creating and operating gas storage facilities.

Alexey Miller and Wang Yilin signed a Memorandum of Understanding between Gazprom, CNPC, and China Huaneng Group on cooperation in the power sector within China. The document reflects the intention of the parties to explore the possibility of implementing joint projects for the construction of thermal power plants.

As part of the effort to develop the Europe – Western China international transport route, Alexey Miller, Wang Yilin, Sergey Kelbakh, Chairman of the Board of the Russian Highways State Company, and Liu Qitao, Chairman of the Board of China Communications Construction Company Ltd., inked a Memorandum of Cooperation. Developed at the initiative of Gazprom, the document is aimed at fostering cooperation between the companies in developing road infrastructure and promoting the use of liquefied natural gas as a vehicle fuel along the aforementioned route.

Background

Gazprom’s main partner in China is CNPC, a state-owned oil and gas company.

In 2014, Gazprom and CNPC signed the Sales and Purchase Agreement for Russian gas to be supplied via the eastern route (Power of Siberia gas pipeline). The 30-year Agreement provides for gas deliveries to China in the amount of 38 billion cubic meters per year.

In 2015, Gazprom and CNPC inked the Heads of Agreement for pipeline deliveries of natural gas from Western Siberian fields to China via the western route (Power of Siberia 2 gas pipeline).

In 2015, Gazprom and CNPC inked the Memorandum of Understanding for the project of pipeline gas supplies to China from Russia’s Far East.

In 2016, Gazprom and CNPC signed the Memorandum of Understanding on underground gas storage and gas-fired power generation in China.

On November 7, 2016, Gazprom and CNPC signed the Memorandum to explore the opportunities for cooperation in the NGV sector.

China Huaneng Group, a Chinese state-owned power generating corporation, is the world leader in terms of installed generating capacity and annual electricity output.

China Communications Construction Company Ltd., which specializes mainly in transport infrastructure construction and heavy engineering, is China’s leading company for the design and construction of roads, bridges, railroads, and ports.

 

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