On 9 April, Russia’s Deputy Prime Minister Arkady Dvorkovich said Gazprom andChinaare close to reaching a landmark gas deal and Russia hopes the agreement will be signed in May.
“Regarding Gazprom’s gas contract, the sides are close to agreement ... The only issue remaining is ... the price,” Itar-Tass quoted Dvorkovich as saying during a trip to China. “We really hope that the contract will be signed in May.”
On 9 April, Gazprom Chairman Aleksei Miller met in Beijing with China National Petroleum Corp (CNPC) Chairman Zhou Jiping to discuss prices for Russian natural gas deliveries. Miller said in a statement posted on the Gazprom website that “progress was made in negotiations on the price of gas”.
Miller also said the “contract would enter into force before the end of 2014”. The next round of talks is scheduled for the end of April.
Talks on fulfillment of agreements reached by the leaders of Russia and China after their summit in the Russian Black Sea resort city of Sochi last February and preparations of Russian President Vladimir Putin’s forthcoming visit to China were high on agenda of the meeting.
Gazprom has been in talks with CNPC for a decade. The issue of the gas price has been a major stumbling block in gas supply negotiations between the two national companies.
However, rising geopolitical tension between Russia and the European Union following Russia’s illegal annexation of Crimea could make the deal more pressing for the Russian side, analysts said.
They also note, however, that Europe will have trouble weaning itself off Russian natural gas as its faces declining production at home and Asian competition for supplies.
Meanwhile, Gazprom has made no secret it aims to claw back its market share, having built the Nord Stream gas pipeline to Germany and planning the South Stream pipeline to southern Europe, bypassing Ukraine.
As European countries more than ever discuss to diversify their gas supplies, lessening their reliance on Russia, Gazprom faces pressure to secure alternative markets for its gas.
Washington and Brussels have discussed widening the sanctions imposed on Russia. For now, sanctions targets have been limited to individuals with close ties to the Kremlin and a Russian bank, but US President Barack Obama spoke about the possibility of deeper sanctions against Russian energy, finance and trade.