Media: Russian-Chinese negotiations on new gas contracts came to a deadlock

The two-year-long negotiations with China on increasing gas supplies and the building of two new pipelines have come to a deadlock, as stated in an article by Reuters.

Sources of the agency who are familiar with the situation note that Beijing does not see the need for "The Power of Siberia-2" pipeline (western route) and supplies from Sakhalin (Far Eastern route), which had been discussed since 2015. The capacity of the first gas pipeline, as expected, will be 30 billion cubic meters per year, the second one will be 8 billion cubic meters.

Sources added that there is no progress in negotiations with Beijing on the Western and Far Eastern routes. China is pausing negotiations to explore additional opportunities in the liquefied natural gas (LNG) market, and it may also review the schedule for switching the enterprise’s focus from coal to gas, the source explained.

"China is not ready to make a decision (now)," the source said.

A Reuters source in Gazprom also confirmed the lack of progress in negotiations on these two routes. He clarified that the Chinese authorities reviewed the policy on the refusal of coal, and in addition, they were interested in buying liquefied gas from the US.

According to Bloomberg, an agreement on the supply of American LNG to PR China was achieved during the negotiations between Xi Jinping and Donald Trump in April.

In May, the U.S. Department of Commerce announced the signing of a bilateral trade agreement that will expand access to US energy companies for the Chinese market.

A week later, Cheniere Energy, the pioneer of US LNG exports, which had sent five tankers last year to China, announced that it was preparing a long-term contract with the PRC.

On May 14th, at the Silk Road Summit in Beijing, Wang Yilin, the Head of China's largest oil and gas state corporation CNPC, announced the need to expand the hydrocarbon supply base through oil and gas from the United States. Xi Jinping has agreed with Trump during his visit to Washington that part of the cost of their construction will be undertaken by US companies.

  China, Russia, gas contract