Alexander Medvedev, Deputy Chairman of the Gazprom Management Committee and Wang Dongjin, Vice President of the China National Petroleum Corporation had another round of commercial negotiations today in the Chengdu town.

The talks were devoted to the prospects of partnership development in the energy sector.

The parties discussed the ongoing cooperation and the opportunities for its extension as well as a subject matter and the schedules for the joint research that would have to outline the effective parameters for future relationships between the two companies in the Chinese gas market.

As part of experience sharing, the parties agreed to assign a group of Gazprom's technical experts to the shale gas fields being currently developed by CNPC. Within the first trip scheduled for July 17, 2012, Gazprom's experts will visit the production facilities of the Changning field, near the Yibin town (Sichuan Province).

Background

CNPC is the largest state-owned petroleum company in China (the Government holds a 100 per cent stake) 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 covers examination of the issues relative to the arrangement of natural gas delivery from Russia to China by Gazprom. The opportunities are also being explored for joint gas processing and gas chemical projects in eastern Russia and in third countries.

The Joint Coordinating Committee was set up to supervise the Agreement implementation. The Committee resolved to set up the Joint Working Group to ensure day-to-day execution of the Agreement in parallel with working groups for major joint businesses.

In June 2009 the Governments of Russia and China signed the Memorandum of Understanding for cooperation in the natural gas sector.

In October 2009 Gazprom and CNPC inked the Framework Agreement on major terms and conditions for natural gas supply from Russia to China. In December 2009 the Basic Major Terms of Gas Supply from Russia to China were signed.