CNPC and Gazprom Strengthen Cooperation on Gas

During the past SCO summit in China, a working meeting between Wang Yilin, Chairman of the Board of Directors of CNPC, and Alexey Miller, Chairman of the Gazprom Management Committee, took place today in Beijing. The two parties discussed the commercial and technical aspects of gas supplies to China from Russia’s Far East (Power of Siberia). Emphasis was placed on joint efforts in such areas as underground gas storage, promotion of the use of natural gas as a vehicle fuel, and gas-fired power generation.

At the meeting, the two parties signed a supplementary agreement to the agreement for cooperation in the field of mutual recognition of standards and conformity assessment results, inked on November 7, 2016. The new document envisages the introduction of regulations on the terms and mechanisms of mutual recognition of testing results for the products of common interest for both companies.

Background

On May 21, 2014, Gazprom and CNPC signed the Sales and Purchase Agreement for Russian gas to be supplied via the eastern route (Power of Siberia gas pipeline). The 30-year Agreement provides for gas deliveries to China in the amount of 38 bcm per year.

In 2015, Gazprom and CNPC inked the Memorandum of Understanding for the project of pipeline gas supplies to China from Russia’s Far East.

In 2016, Gazprom and CNPC signed the Memorandum of Understanding on underground gas storage and gas-fired power generation in China, the Memorandum to explore the opportunities for cooperation in the NGV sector, and the Agreement to cooperate in the field of mutual recognition of standards and conformity assessment results.

In July 2017, Gazprom and CNPC inked the Supplementary Agreement to the Sales and Purchase Agreement for gas to be supplied via the eastern route inked in 2014. According to the document, gas supplies will commence on December 20, 2019.

In December 2017, Gazprom and CNPC signed the Heads of Agreement for natural gas to be supplied from Russia’s Far East to China.