Analysis: Time Running Out on 15-Year Gas Stalemate Between Russia and China

by Colonel on March 22, 2013

“As China’s new President Xi Jinping meets Russian President Vladimir Putin, prospects are dim for substantial progress on a deal between the world’s largest conventional gas producer and its fastest growing energy consumer.

The failure stands in sharp contrast to the Russian-Chinese trade in crude oil, which helped finance Moscow’s push to supply Asia from new East Siberian fields, and is likely to be expanded with new supply deal during Xi’s visit.

The gas deal has been held up by Russian gas export monopoly Gazprom’s determination to match the returns it makes on high-priced European deliveries and cover the $38 billion cost of bringing its untapped East Siberian gas resources to market.

China, for its part, says it cannot afford to pay Gazprom’s asking price, which analysts and sources in the gas industry peg at $300 per thousand cubic meters.

” – Melissa Akin and Chen Aizhu, Copyright 2013 Thomson Reuters

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