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Business/Finance See other Business/Finance Articles Title: Sino-Russian gas deal delayed indefinitely as economic ties cool Want... A deal for Russia to supply natural gas to China via the Power of Siberia-2, also known as the Altai gas pipeline, has been delayed indefinitely, reports Duowei News, a US-based Chinese political news outlet. Citing Russian media sources, the report said that negotiations on the western route from Russia's Western Siberia to northwestern China have stalled as the two companies involved, Russia's Gazprom — the largest extractor of natural gas in the world — and state-owned China National Petroleum Corporation are reviewing their options in light of slowing economic conditions. Under the original deal, Russia was to deliver 30 billion cubic meters (bcm) of gas a year to China through the pipeline. This was in addition to another 38 bcm to be delivered annually through an eastern route — the Power of Siberia pipeline — work on which has already commenced after the two sides signed a historic US$400 billion deal last May when Russian president Vladimir Putin's paid a visit to Shanghai. During the visit, Putin and his Chinese counterpart Xi Jinping also signed a memorandum of understanding on the Altai pipeline, with Putin noting that Moscow and Beijing had "agreed on many technical and commercial aspects of the project." Since then, however, demand growth for gas in China appears to be slowing, while access to liquefied natural gas has become more available from countries such as Australia due to the fall in oil prices, according to Valery Nesterov, an analyst with Moscow-based investment banking firm Sberbank CIB. Gas consumption in China rose by 12%-13% in 2013 but has slowed considerably since, with the growth rate dropping to 8.5% last year and just 2% in the first half of 2015, Nesterov said, adding that this means Gazprom will no longer be able to receive a high price for gas delivered through the western route. Sergei Sanakoev, chair of the Russia-Chinese Center for Trade and Economical Cooperation, said Gazprom has offered CNPC a high price for the gas on the basis of the high cost of constructing the Power of Siberia-2 pipeline. However, Sanakoev stated that "China is ready to build the pipeline at a cheaper cost and at public tender, so its companies could participate and for the construction price to be transparent." "Gazprom refuses and China does not hurry," he said, adding that the deal may "also require political interference." Gazprom CEO Aleksey Miller and Russian energy minister Aleksandr Novak previously said the contract for the western route could be finalized by May or June 2015, though only an agreement on the basic conditions of gas supplies via the pipeline was signed in May. The talks on the western route that are "currently non-intensive, could be given a new impetus during Vladimir Putin's upcoming trip to China in early September," a Russian official told Moscow-based newspaper Vedomosti. Despite strengthening political ties and military cooperation, the impasse on the gas deal suggests that the economic relationship between China and Russia is cooling, Duowei said. On Wednesday, Chinese commerce ministry spokesperson Shen Danyang revealed that China's foreign direct investment in Russia dropped 25% in the first half of 2015 year on year. Earlier this month, China's General Administration of Customs released statistics that also suggested that trade between the two countries fell by 30.2% in the first six months of the year. Additionally, the Moscow Times reported Thursday that weakened domestic and internal demand has seriously affected Gazprom's natural gas production, which fell by a record 19% year on year in June and 12.9% over the first six months of 2015, while export volume also dropped by 8%. In recent years, Gazprom has accounted for nearly 20% of Moscow's fiscal revenue and represented nearly 10% of Russia's GDP. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 2.
#1. To: Tatarewicz (#0)
The Chicoms are backing away won't be anything good for Vladamir. He's hung his moon on that pipeline. Plan B may bring out the singing clowns down all around us.
HA..... I was just going to say I hope the nukes won't be flying this year.
There are no replies to Comment # 2. End Trace Mode for Comment # 2.
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