Proposed agreement to supply Russian natural gas to China will not materialise during the next week's visit of Russian President Vladimir Putin here as the two countries failed to agree on pricing, officials have said.
No gas price agreement between Moscow and Beijing had been reached, and no agreement is likely to be signed during Putin's visit to China on June 5, Russian Vice-Prime Minister Arkady Dvorkovich said after his talks with his Chinese counterpart Wang Qishan yesterday.
The biggest stumbling block in the 30-year deal between the world's largest gas producer and the fastest-growing energy market is the gas pricing formula, Dvorkovich was quoted as saying in the official media here today.
Russia wants to sell its gas to China for USD 350 to USD 400 per 1,000 cubic meters, while China, which intends to buy up to 68 billion cubic meters per year, wants to pay USD 200- USD 250.
China, frustrated by years of stalemate over price, increased its supplies from Turkmenistan last year, state run China Daily reported.
The two countries signed a binding agreement in 2010 covering the creation of two export corridors to supply Russian gas to China.
"Russia is rich in natural gas resources and the Chinese market has great potential. The two sides should boost their gas cooperation strategically and unswervingly," Wang said.
Wang hailed the China-Russia crude oil pipeline, which transported 15 million metric tons of crude oil in the last year, as a "landmark" energy cooperation project between the two nations.
The two sides should strengthen their cooperation on allowing Chinese enterprises to take part in Russia's project development at the upstream part of the industrial chain and giving Russian enterprises a role in China's refinement at the downstream end to realize complementary advantages, said the Chinese official.
Wang also called for the two nations to deepen cooperation on nuclear energy.