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Gazprom enters deal on construction of pipeline in Far East to supply gas to China

Xie Jun, Vice President of CNPC, with Oleg Aksyutin

Gazprom, a Russian majority state-owned multinational energy corporation, recently announced the signing of an agreement with China National Petroleum Corporation (CNPC) and China Oil & Gas Pipeline Network Corporation (PipeChina) in St. Petersburg for clean energy development.

The deal involves agreement on the design and construction of a pipeline section in the Far East, which will be used to deliver Russian gas to China. The signing ceremony took place in the presence of Alexey Miller, Chairman of the Gazprom Management Committee.

The agreement, according to Gazprom, governs the cooperation between the parties with regard to the design development and construction of the trans-border section of the gas pipeline to cross the Ussuri River in the vicinity of the Dalnerechensk town (Russia) and the Hulin city (China).

“The trans-border section is an essential element in the project for gas supplies from Russia to China via the Far Eastern route,” said Gazprom in a statement

Gazprom’s main partner in China is CNPC, a state-owned oil and gas company.

“China and Russia have strong complementarities in the energy sector, and there is still plenty of room for cooperation. The latest agreement will further enrich the channels for Russian gas imports to China,” said Lin Boqiang, the director of the China Center for Energy Economics Research at Xiamen University

In 2014, Gazprom and CNPC signed a 30-year Sales and Purchase Agreement for 38 billion cubic meters of gas per year to be supplied via the eastern route (Power of Siberia gas pipeline). The ceremony marking the start of the first-ever pipeline supplies of Russian gas to China took place on December 2, 2019. This is the time Russia started gas supplies to China via the Power of Siberia pipeline.

At present, China and Russia have only one land-based natural gas pipeline, which is known as the China-Russia east-route natural gas pipeline.

The long-term Sales and Purchase Agreement for natural gas to be supplied via the Far Eastern route was signed in February 2022. As soon as the project reaches its full capacity, the amount of Russian pipeline gas supplies to China is going to grow by 10 billion cubic meters, totaling 48 billion cubic meters per year.