Russian gas supplies to China to be priced without linkage to Henry Hub
The Gazprom headquarters hosted yesterday evening a working meeting between Alexey Miller, Chairman of the Company's Management Committee and Zhou Jiping, President of China National Petroleum Corporation (CNPC).
The parties addressed issues related to the conclusion of a long-term contract for Russian gas supplies to China. The contract is planned to be signed before this year-end.
“The price of gas to be supplied to China won't be linked to the US spot market prices”, noted Alexey Miller after the negotiations.
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.
Gazprom and CNPC signed the Agreement of Strategic Cooperation on October 14, 2004. Among other things, the Agreement stipulates examining issues in respect of natural gas deliveries to be effected by Gazprom from Russia to China. The opportunities are also being explored for joint gas processing and gas chemical projects in Eastern Russia and third countries. The Joint Coordinating Committee was set up to supervise the Agreement implementation. The Committee resolved to set up a Joint Working Group to ensure day-to-day execution of the Agreement as well as working groups responsible for major joint businesses.
In October 2009 Gazprom and CNPC inked the Framework Agreement on the major terms and conditions of natural gas supplies from Russia to China. In September 2010 the detailed Heads of Agreement on gas supplies from Russia to China was 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.