Different Price for Russia-China Eastern, Western Route Gas Pipelines
China is expected to pay different price for gas that would flow from Russia via eastern and western routes, CNPC board chairman told Rossiya 24 TV channel Thursday, TASS news agency reported.
"It’s difficult to compare eastern and western routes. The eastern route project is closer to the sales market in China while the western, on the contrary, is at a very big distance. Furthermore, we have fully established the accounts base on the eastern route but the market on the western route is still to be captured. Therefore, we should discuss the cooperation model together with the Russian side in terms of sharing benefits and risks of this project. As far as the price is concerned, it will be different most probably yet determined according to market principles in any case,” Wang said.
The western route, also known as Power of Siberia-2, envisages gas supply to China from Western Siberia’s fields to the tune of 30 billion cubic meters a year. On May 8, 2015 Gazprom and CNPC inked the heads of agreement for pipeline gas supply from Russia to China via the western route. On September 3, 2015 the two parties signed a memorandum of understanding on natural gas supplies from Russia to China through the pipeline from the Far East
Work on the eastern route, or Power of Siberia, is continuing with China expected to build up to 50 miles of the gas pipeline on its territory in 2016. According to Sputnik, Gazprom and CNPC will start building a cross-border section of a pipeline for the Power of Siberia gas project in June.
On May 21, 2014, a gas purchase and sales contract via the eastern route pipeline was signed between CNPC and Gazprom. Under the 30-year contract, Gazprom will start transmitting gas to China via the eastern route from 2018, with gas delivery gradually increasing to 38 billion cubic meters per annum.
The imported gas will mainly supply China's Northeast, Beijing-Tianjin-Hebei area, and the Yangtze River Delta region.
Earlier this month, China’s Ministry of Environmental Protection approved the Chinese section of the Russia-China eastern route natural gas pipeline.