China

Partnership between Russia and China in the sphere of natural gas steps up to an completely new level. In 2019-2021, first volumes of Russian pipeline gas will be delivered to China.

Projected natural gas consumption in the PRC is estimated by market participants at the level of 300-350 bcm a year by 2020, and at a level around 500 bcm a year by 2030.

The main partner of Gazprom on the Chinese market is China National Petroleum Corporation (CNPC) — the largest state-owned oil and gas company in China and one of the leading integrated oil and gas production companies in the world.

On May 21, 2014, Gazprom and CNPC signed the Purchase and Sale Agreement to supply Russian gas via the Eastern route. It is the biggest purchase and sale contract in the history of the global gas industry. The 30-years’ agreement implies delivering 38 bcm of natural gas annually to the PRC from Yakutia and Irkutsk gas production centers via the Power of Siberia gas trunkline.

On October 13, 2014, in Moscow the parties signed a Technical Agreement — a supplement to the Purchase and Sale Agreement. This document defines basic parameters of design, construction and operation of the Power of Siberia gas trunkline’s cross-border section. In addition, the document contains the main technical and technological features of gas transfer from seller to buyer.

In May 2015, Chairman of the Gazprom Management Committee Alexey Miller and CNPC Vice President Wang Dongjin signed a Common Terms Agreement determining the main technical and commercial parameters of supply along the prospective Power of Siberia 2 pipeline. Gazprom and CNPC are continuing to discuss the terms of the sale-purchase agreement.

In 2015, Gazprom and CNPC also signed a Memorandum of Understanding on a project envisioning pipeline supplies of natural gas to China originating in the Russian Far East.

In September 2016, Gazprom and CNPC signed an EPC contract for the construction of an underwater crossing for the cross-border section of the Power of Siberia pipeline under the Amur River. In April 2017, a temporary two-way checkpoint was built on the state border as part of the project, in order to provide unfettered access to the restricted area for operating personnel and construction equipment. The checkpoint opened on May 11, 2017.

On July 4, 2017, Gazprom and CNPC signed a Supplementary Agreement to the Sales and Purchase Agreement for Russian gas supplies via the eastern route, defining the starting date for the deliveries. According to this document, gas supplies to China via the Power of Siberia gas trunkline will begin in December 2019.

The Russian and Chinese sides are also continuing talks on studying the prospects for cooperation with respect to building generating capacities in China, as well as UGS, for the purposes of supporting an increase in supplies of Russian “blue fuel”. In 2016, Gazprom and CNPC signed a Memorandum of Understanding in the area of underground gas storage and gas-powered electricity. In February 2017 Agreement was inked between Gazprom and CNPC to conduct geotechnical surveys for the creation of UGS facilities. In May 2017, three contracts were signed at the Belt and Road Forum in Beijing to conduct pre-development surveys for the purposes of creating underground gas storage facilities in China’s Heilongjiang and Jiangsu provinces.

On May 15, 2017, Gazprom, CNPC, Russian Highways, and China Communications Construction Company Ltd. inked a Memorandum of Cooperation aimed at developing road infrastructure and promoting the use of liquefied natural gas as a vehicle fuel along the Europe — Western China international transport corridor route. Also that day, Gazprom, CNPC, and China Huaneng Group signed a Memorandum of Understanding to pursue joint efforts in the power sector within China.

Related news:

Russian gas supplies to China via Power of Siberia to start in December 2019 – 04.07.2017

Over 1,100 kilometers of Power of Siberia gas pipeline to be completed by late 2017 – 08.06.2017

Documents signed to advance Russian-Chinese cooperation in underground gas storage, power generation, and road infrastructure – 15.05.2017

Checkpoint for construction personnel at Power of Siberia’s cross-border section opened on Russian-Chinese border – 11.05.2017

Over 500 kilometers of the Power of Siberia gas trunkline have been built by the end of February 2017 – 01.03.2017

Gazprom and CNPC broadening strategic cooperation in energy sector – 15.02.2017

Gazprom and CNPC sign EPC contract to construct underwater crossing of Power of Siberia – 04.09.2016

Gazprom and CNPC sign Memorandum of Understanding on underground gas storage and gas-fired power generation – 25.06.2016

Gazprom and CNPC sign Agreement on Power of Siberia cross-border section and other documents for further cooperation – 17.12.2015

Gazprom and CNPC sign Heads of Agreement for gas supply via western route – 08.05.2015

Russia and China sign Framework Agreement on gas supplies via western route – 09.11.2014

Gazprom and CNPC sign Technical Agreement on gas supplies via eastern route – 13.10.2014

Russia and China signed the biggest contract in the entire history of Gazprom – 21.05.2014