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Firms mull China-Russia gas pipeline
By Wang Ying (China Daily)
Updated: 2005-09-22 06:49

OAO Gazprom, the world's biggest natural gas producer based in Moscow, said it is in talks with China's largest oil and gas producer to export gas to China through a cross-border pipeline.

Of two possible routes, Gazprom and China National Petroleum Corp (CNPC) are under discussion over "which has the priority," Alexander Medvedev, deputy chief executive officer of Gazprom told reporters at a Beijing press conference yesterday.

The finally recommended line may run through northeastern China's Heilongjiang Province or the Xinjiang Uygur Autonomous Region in the west, Medvedev said. Each has an annual capacity of as much as 30 billion cubic metres (bcm) a year.

"We are discussing figures of between 20 bcm and 30 bcm for each project," said Medvedev.

Sources said the western route is expected to link with China's internal west-east Gas Pipeline, which will transport 12 billion cubic metres of natural gas from the Tarim Basin in Xinjiang to Shanghai, some 4,000 kilometres away.

The two lines are being "carefully analysed on both sides," Medvedev yesterday told reporters.

A CNPC official, who declined to be identified, yesterday told China Daily the two companies are "in close contact" over the issue, but declined further comment.

Wang Jianing, representative office advisor of OAO Gazprom Beijing, yesterday told China Daily the negotiation is still at the preliminary stage, and has not gone far enough to touch upon the pricing system for the gas exports.

Pipelines within Russia will be built by Gazprom, while those in China would be financed by its Chinese partner CNPC, Medvedev said at the conference.

But Gazprom will be interested in investing in China's pipeline infrastructure if Beijing backed the move, he said.

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