Gazprom and CNPC agree to use ruble and yuan for gas payment – Gazprom

PetroChina’s logo is seen at a gas station in Beijing, China March 21, 2016. REUTERS/Kim Kyung-Hoon/File Photo GLOBAL BUSINESS WEEK AHEAD

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SINGAPORE, Sept 7 (Reuters) – State-owned energy giants Gazprom (GAZP.MM) and China National Petroleum Corporation (CNPC) signed several agreements on Tuesday, including on the use of the Russian ruble and Chinese yuan to pay supply of Russian natural gas from China, says Gazprom.

The deals came on top of a February deal between them to boost gas supplies from 2023 via the eastern route of a China-Russia gas pipeline, cementing an energy alliance at a time of strained relations between Russia and the West on Ukraine and other issues.

Gazprom CEO Alexei Miller said in a statement on its website that allowing payments in Russian rubles and Chinese yuan was “mutually beneficial” for Gazprom and China’s state-owned CNPC.

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Russian President Vladimir Putin said on Wednesday that China would pay Gazprom for its gas on the basis of a 50-50 split between the ruble and the yuan. Read more

Gazprom, which has a monopoly on Russian gas exports via pipeline, said the linear part of the pipeline connecting the Kovyktinskoye field in the Irkutsk region to the Chayandinskoye field in Yakutia was almost complete. Gas from the Kovykta field is expected to be delivered to Power of Siberia before the end of 2022, the company said.

“Compliance with Gazprom’s contractual obligations to increase the volume of gas supplies from China in 2023 will be ensured,” the company said.

In February, China and Russia signed a 30-year contract for the supply of 10 Gm3 of gas per year. Read more

Gazprom said the main technical parameters for deliveries have been fixed and it has started designing the pipeline.

Russia already sends gas to China through its Power of Siberia pipeline, which began pumping supplies in 2019, and by shipping liquefied natural gas (LNG). It exported 16.5 billion cubic meters (bcm) of gas to China in 2021.

According to previously drawn up plans, Russia will increase annual gas transportation through the pipeline to China to 38 billion m3 by 2025 from 5 billion m3 in the first year.

CNPC, the parent company of PetroChina (601857.SS), said on Wednesday it had signed an agreement with Gazprom over the Power of Siberia gas pipeline, but did not provide further details.

China’s foreign and trade ministries were not immediately available for comment.

Gazprom and CNPC executives met via video conference held during the 2022 Eastern Economic Forum.

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Reporting by Muyu Xu, Dominique Patton and Reuters; Editing by Jacqueline Wong and Tom Hogue

Our standards: The Thomson Reuters Trust Principles.

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