Gazprom to focus on building gas exports to China

5/13/2014

Gazprom to focus on building gas exports to China

ELENA MAZNEVA

MOSCOW (Bloomberg) -- OAO Gazprom will focus on building exports to China, without bringing partners from the neighboring country into drilling projects.

Gazprom isn’t considering Chinese companies to help develop its gas fields in Russia, Deputy CEO Vitaly Markelov told reporters in Moscow. “We’re not looking at that,” he said, in response to a question. “We’re talking about gas supplies with Chinese companies.”

Russian President Vladimir Putin is turning to Asia as financing from the U.S. and European Union tightens and capital outflows surge because of tensions over Ukraine. China, Russia’s largest trading partner with $94.5 bn of business last year, was the only country in the United Nations Security Council not to censure Putin’s actions in Ukraine.

Gazprom is preparing a supply contract with China, which it aims to sign when Putin visits the Asian nation next week, Deputy Energy Minister Anatoly Yanovsky said May 12. The company plans to deliver as much as 38 Bcm of gas to China no sooner than the end of 2018, after more than a decade of talks and false starts.

The contract is 98% ready, Yanovsky said.

While Gazprom has few foreign partners at production sites in Russia, OAO Rosneft, the state-run oil producer, has signed a spate of deals with U.S., European and Asian companies as it seeks to ramp up exports. In October, Rosneft said it plans to sell China National Petroleum Corp. a 49% stake in an East Siberian oil production venture, after the two signed a $270 bn, 25-year oil supply deal earlier in the year.

PetroChina Co., CNPC’s publicly traded unit, is interested in spending at least $10 bn for a minority share of East Siberian gas fields operated by Gazprom and Rosneft, people with knowledge of the matter told Bloomberg in September.

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