4 February 2011

Negotiations with China going in a constructive manner

Gazprom Export is optimistic on the prospects of Russian natural gas supplies to China.

“Our company and China’s PetroChina are expected to sign a gas sale-and-purchase contract in the summer of 2011”, the Head of Department of liquefied natural gas export, Marina Surzhenko said, speaking in Moscow at a forum organized by Troika Dialog. – “The signing of Expanded basic terms and conditions for such supplies in September 27, 2010 was a crucial event in the negotiations. This agreement addressed the main issues - flexibility level, “take-or-pay” conditions, period for increasing volumes, etc”.

According to her, negotiations are being conducted “in a very constructive manner, detailed terms and conditions of the future contract are being negotiated”.

“At the same time we see significant positive changes in China’s gas market, whose consumption in 2010 totaled about 108 billion cubic meters”, M. Surzhenko noted. “In late 2010, the government of that country published a new forecast of gas consumption in China, according to which by 2020, it expects demand at the level of 350-400 billion cubic meters. It is obvious that such a sharp increase in consumption is possible only with strong support from the state and under sufficient natural gas supply. In this situation, we believe that Russian gas supplies will play a significant role in solving China’s objectives”.

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