Russian official optimistic after talks

Updated: 2012-06-02 02:58

By Li Xiaokun (China Daily)

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Although no breakthroughs were announced, China and Russia's energy talks on Friday will help the two nations agree on a long-awaited gas deal in a relatively short time, a high-ranking Russian official has said.

"I like the open atmosphere," Russian Vice-Prime Minister Arkady Dvorkovich told the Russian news agency RIA Novosti after his talks with Chinese Vice-Premier Wang Qishan at the Great Hall of the People on Friday morning.

"And I think the talks will inject energy into companies from the two nations and enable them to find solutions acceptable to both sides on the natural gas and refinery issues," he said.

Media reports previously suggested that the two nations would agree on gas prices ahead of the meeting between President Hu Jintao and his Russian counterpart Vladimir Putin, who is expected to arrive in China on June 5 for an official visit and then attend a Shanghai Cooperation Organization summit in Beijing scheduled for June 6-7.

However, Dvorkovich told RIA Novosti before the talks on Thursday that no gas price agreement between Moscow and Beijing had been reached, and no agreement is likely to be signed during Putin’s visit to China.

The biggest stumbling block in the 30-year deal between the world's largest gas producer and the fastest-growing energy market is the gas pricing formula.

Russia wants to sell its gas to China for $350-$400 per 1,000 cubic meters, while China, which intends to buy up to 68 billion cubic meters per year, wants to pay $200-$250.

China, frustrated by years of stalemate over price, increased its supplies from Turkmenistan last year.

Last month, a senior energy official visiting Moscow as part of a delegation led by Vice-Premier Li Keqiang told reporters that China had proposed a new model for cooperation on gas during the visit.

In 2010, Moscow and Beijing signed a binding agreement covering the creation of two export corridors to supply Russian gas to China.

The first would be supplied with gas from fields in Western Siberia, while the second one envisages development of gas deposits in Eastern Siberia, Russia’s Far East and the Sakhalin shelf.

"Russia is rich in natural gas resources and the Chinese market has great potential. The two sides should boost their gas cooperation strategically and unswervingly," Wang told Dvorkovich during the eighth round of the China-Russia energy negotiators'meeting on Friday, according to a press release issued by the Foreign Ministry.

Wang hailed the China-Russia crude oil pipeline, which transported 15 million metric tons of crude oil in the last year, as a "landmark" energy cooperation project between the two nations.

The two sides should strengthen their cooperation on allowing Chinese enterprises to take part in Russia's project development at the upstream part of the industrial chain and giving Russian enterprises a role in China's refinement at the downstream end to realize complementary advantages, said the Chinese official.

Wang also called for the two nations to deepen cooperation on nuclear energy.

Chinese enterprises are also encouraged to import electricity from Russia and further advance pragmatic cooperation with their Russian partners in building electricity grids, he added.

Xing Guangcheng, an expert on Russian studies with the Chinese Academy of Social Sciences, said it is normal for the countries to ask for more time to discuss details of the gas deal.

"Plus, ties between Beijing and Moscow have been very mature. Big commercial deals are not necessary to highlight the ties or decorate Putin’s visit."

Xing said he is optimistic about the deal, yet stressed that it is actually about a commercial negotiation between large firms, although intertwined with national interests.

RIA Novosti and Reuters contributed to this story.

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