China makes new proposal on Russia gas deal

Sat Apr 28, 2012 4:28pm EDT
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By Melissa Akin and Gleb Bryanski

MOSCOW (Reuters) - Chinese energy officials signaled on Saturday they were keen to pursue a major gas deal with Russia despite a proliferation of alternative supplies, and said they had made a new proposal to overcome a price deadlock.

Talks between China, the world's fastest growing energy consumer, and Russia, the world's largest conventional gas producer, fell apart late last year when China, frustrated by years of stalemate over price, increased its supplies from rival producer Turkmenistan.

A senior energy official visiting Moscow as part of a delegation led by Chinese Vice Premier Li Keqiang, who is on track to succeed Premier Wen Jiabao, told reporters China had proposed a new model for cooperation on gas during the visit.

"Now all that remains is the question of prices," said Liu Tienan, the head of China's National Energy Administration.

He said Li had presented "a completely new model of development of cooperation ... in the natural gas sphere, and received a positive assessment from the Russian side."

"We are interested in the companies of our two countries beginning discussions and consultations on this issue under the new model of cooperation."

Earlier in the day, the chairman of China National Petroleum Corp. (CNPC), Jiang Jiemin, reiterated to an economic conference that most of the key points of a gas deal were agreed.

"We have signed a buy-sell agreement with Gazprom," Jiang said, singling out the deal among successful ventures including a loans-for-oil deal, under which China receives 300,000 barrels per day via a dedicated pipeline, and joint oil exploration in Siberia.   Continued...