OAO Gazprom, the world’s largest natural gas producer, rose in Moscow as it continued talks in China on a $400 billion gas supply deal.
Gazprom shares rose as much as 2.2 percent, trading up 0.5 percent at 146 rubles by 12:14 p.m. Moscow time, after declining 1.8 percent yesterday.
A Russian delegation led by President Vladimir Putin failed to agree on a price for the final contract before a signing ceremony in Shanghai yesterday.
“There’s reason for optimism,” Dmitry Peskov, the Kremlin’s spokesman, said by phone, without elaborating. Sergei Kupriyanov, Gazprom’s spokesman, declined to comment on a possible gas agreement by phone from Shanghai.
Russia and China are holding “continous” talks to find a compromise, Gazprom Chief Executive Officer Alexey Miller said in a statement yesterday, after Putin and his Chinese counterpart Xi Jinping signed bilateral agreements that didn’t include the gas deal.
“There’s still hope that Gazprom may sign the contract after more than a decade of talks,” said Ekaterina Rodina, an oil and gas analyst at VTB Bank in Moscow.
“No one knows for sure, but yesterday Russian officials said an agreement could be reached at any time, today in China or this week at the St. Petersburg economic forum or later.”
Russian officials said before the meeting that the two sides were very close to agreeing on the price. That has been the stumbling block throughout the past decade, though with Putin facing sanctions from the U.S. and Europe after he annexed Crimea, an agreement had been seen as more likely than at previous summits.
Gas Pipeline
“It’s time we reached an agreement with the Chinese on this issue,” Russian Prime Minister Dmitry Medvedev said in a Bloomberg Television interview in Moscow on May 19. “It is very likely that there will be a contract, which means long-term contracts.”
The contract would pave the way for Gazprom to build a $22 billion pipeline linking the world’s largest energy producer with the biggest consumer. The company plans to deliver as much as 38 billion cubic meters (1.34 trillion cubic feet) annually after years of false starts.
Supplies China may begin in 2019 to 2020, Russia Energy Minister Alexander Novak said in March. “I believe that in the long run the price will be fair and totally comparable to the price of European supplies,” Medvedev said in the interview.
Gazprom’s average price in Europe was $380.50 per thousand cubic meters last year. CLSA Ltd. forecasts a price for Russia’s gas of $9.50 to $10 per thousand cubic feet ($335 to $350 per thousand cubic meters) delivered to the Chinese border.
That target, worth almost $400 billion over a 30-year contract, compares with the $10 per thousand cubic feet China pays for imports from Turkmenistan and is substantially lower than liquefied natural gas at about $15, CLSA said.
“If the Russia-China gas deal isn’t signed in the near-term, the window of opportunity may be closing fast as other supply sources enter the market,” Xizhou Zhou, director of China Energy at IHS Inc., a consultant, said before yesterday’s meeting.
bloomberg.com
Gazprom shares rose as much as 2.2 percent, trading up 0.5 percent at 146 rubles by 12:14 p.m. Moscow time, after declining 1.8 percent yesterday.
A Russian delegation led by President Vladimir Putin failed to agree on a price for the final contract before a signing ceremony in Shanghai yesterday.
“There’s reason for optimism,” Dmitry Peskov, the Kremlin’s spokesman, said by phone, without elaborating. Sergei Kupriyanov, Gazprom’s spokesman, declined to comment on a possible gas agreement by phone from Shanghai.
Russia and China are holding “continous” talks to find a compromise, Gazprom Chief Executive Officer Alexey Miller said in a statement yesterday, after Putin and his Chinese counterpart Xi Jinping signed bilateral agreements that didn’t include the gas deal.
“There’s still hope that Gazprom may sign the contract after more than a decade of talks,” said Ekaterina Rodina, an oil and gas analyst at VTB Bank in Moscow.
“No one knows for sure, but yesterday Russian officials said an agreement could be reached at any time, today in China or this week at the St. Petersburg economic forum or later.”
Russian officials said before the meeting that the two sides were very close to agreeing on the price. That has been the stumbling block throughout the past decade, though with Putin facing sanctions from the U.S. and Europe after he annexed Crimea, an agreement had been seen as more likely than at previous summits.
Gas Pipeline
“It’s time we reached an agreement with the Chinese on this issue,” Russian Prime Minister Dmitry Medvedev said in a Bloomberg Television interview in Moscow on May 19. “It is very likely that there will be a contract, which means long-term contracts.”
The contract would pave the way for Gazprom to build a $22 billion pipeline linking the world’s largest energy producer with the biggest consumer. The company plans to deliver as much as 38 billion cubic meters (1.34 trillion cubic feet) annually after years of false starts.
Supplies China may begin in 2019 to 2020, Russia Energy Minister Alexander Novak said in March. “I believe that in the long run the price will be fair and totally comparable to the price of European supplies,” Medvedev said in the interview.
Gazprom’s average price in Europe was $380.50 per thousand cubic meters last year. CLSA Ltd. forecasts a price for Russia’s gas of $9.50 to $10 per thousand cubic feet ($335 to $350 per thousand cubic meters) delivered to the Chinese border.
That target, worth almost $400 billion over a 30-year contract, compares with the $10 per thousand cubic feet China pays for imports from Turkmenistan and is substantially lower than liquefied natural gas at about $15, CLSA said.
“If the Russia-China gas deal isn’t signed in the near-term, the window of opportunity may be closing fast as other supply sources enter the market,” Xizhou Zhou, director of China Energy at IHS Inc., a consultant, said before yesterday’s meeting.
bloomberg.com
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