CyprusGasNews May 2014 CyprusGasNews for June 2014 | Page 6

Gazprom CEO Alexey Miller, Chairman of the

Company’s Management Committee and Zhou
Jiping, Chairman of China National Petroleum
Corporation (CNPC) signed today a contract
to supply pipeline gas from Russia to China
via the eastern route. The parties signed the
document in the presence of Russian President Vladimir Putin and Chinese President Xi
Jinping in Shanghai.
The 30-year contract stipulates that 38 billion
cubic meters of Russian gas will be annually
supplied to China. The mutually beneficial
contract contains such major provisions as the
price formula linked to oil prices and the ‘takeor-pay’ clause.
“Russia and China have signed the biggest
contract in the entire history of the USSR and
Gazprom – over 1 trillion cubic meters of gas
will be supplied during a whole contractual period. Russian gas will be sold at a brand new
market with a huge potential.
The arrangement of Russian pipeline gas
supplies is the biggest investment project on
a global scale. USD 55 billion will be invested
in the construction of production and transmission facilities in Russia. An extensive gas
infrastructure network will be set up in Russia’s East, which will drive the local economy
forward. Great impetus will be given to entire
economic sectors, namely metallurgy, pipe and
machine building.
Today we started the first page of a big book,
a fascinating story of the Russian-Chinese cooperation in the gas industry, and many more
essential chapters are yet to be written in it,”
said Alexey Miller.

6 |CyprusGasNews

The eastern route stipulates the delivery of 38
billion cubic meters of natural gas from Russia
to China via the Power of Siberia gas trunkline
(unified gas transmission system encompassing
the Yakutia and Irkutsk gas production centers
designed for supplying natural gas to Russia’s
Far East and China). The bulk of pipes used in
the construction will be domestically manufactured. Some 11,700 experts will be engaged
within Phase 1 of the Power of Siberia project
and some 3,000 employees will ensure the pipeline’s operation.
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 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 2010 the Extended Major Terms
of natural gas supply from Russia to China were
signed.
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.