Russia's Gazprom, CNPC agree to use rouble, yuan for gas payments - Gazprom

Authored by reuters.com and submitted by m1h3r
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PetroChina's logo is seen at a petrol station in Beijing, China, March 21, 2016. REUTERS/Kim Kyung-Hoon/File Photo GLOBAL BUSINESS WEEK AHEAD

SINGAPORE, Sept 7 (Reuters) - State energy giants Gazprom (GAZP.MM) and China National Petroleum Corporation (CNPC) signed several agreements on Tuesday, including on the use Russian roubles and Chinese yuan to pay for Russian natural gas supplies to China, Gazprom said.

The agreements were in addition to a February deal between them to increase gas supplies from 2023 via the eastern route of a China-Russia pipeline, bolstering an energy alliance at a time of strained ties between Russia and the West over Ukraine and other issues.

Gazprom CEO Alexei Miller said in a statement posted on its website that allowing for payments in Russian roubles and Chinese yuan was "mutually beneficial" for Gazprom and China's state-owned CNPC.

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Russian President Vladimir Putin said on Wednesday that China would pay Gazprom for its gas based on a 50-50 split between the rouble and yuan. read more

Gazprom, which has a monopoly on Russian gas exports by pipeline, said the linear part of the gas pipeline from the Kovyktinskoye field in the Irkutsk region to the Chayandinskoye field in Yakutia was nearly completed. Gas from the Kovykta field was expected to flow to Power of Siberia before the end of 2022, the company said.

"The fulfilment of Gazprom's contractual obligations to increase the volume of gas supplies to China in 2023 will be ensured," the company said.

In February, China and Russia has signed a 30-year contract for the supply of 10 bcm of gas a year. read more

Gazprom said the main technical parameters of deliveries had been fixed and it had started designing the gas pipeline.

Russia already sends gas to China via its Power of Siberia pipeline, which began pumping supplies in 2019, and by shipping liquefied natural gas (LNG). It exported 16.5 billion cubic metres (bcm) of gas to China in 2021.

Under plans previously drawn up, Russia will increase the annual gas transmission via the pipeline to China to 38 bcm by 2025 from 5 bcm in the first year.

CNPC, the parent of PetroChina (601857.SS), said on Wednesday it had signed an agreement with Gazprom related to the Power of Siberia gas pipeline, but did not provide further details.

China's foreign and commerce ministries were not immediately available for comment.

Gazprom and CNPC executives met via a video conference held during the Eastern Economic Forum 2022.

Reporting by Muyu Xu, Dominique Patton and Reuters; Editing by Jacqueline Wong and Tom Hogue

Our Standards: The Thomson Reuters Trust Principles.

TheRealFlyingBird on September 7th, 2022 at 21:45 UTC »

The vast majority of Russia’s production is not able to be piped to China without major infrastructure work. Since the majority of that gas and oil has no where to go (or be stored), they are going to have to cap a lot of those wells long before the Chinese can build the infrastructure to transport the gas to China.

Rikeka on September 7th, 2022 at 20:05 UTC »

“Roubles and yuan”

Thats just to give face to Russia. Will be just yuan. China has no need of roubles, and will likely not accept them as payment for chinese goods, if not for more than some symbolic gestures to make Russia feel good.

Russia has this fantasy that it can make China choose between the West or Russia. But the russian economy is a very small dying potato compared to the West. China will likely feed off Russia’s carcass as much as it can, it is cheap energy after all.

getSmoke on September 7th, 2022 at 20:03 UTC »

Best buds for ever!

Or until China sees an opening to take from Russia.