OAO Gazprom and China National Petroleum Corp. signed a 30-year natural gas supply contract reportedly worth $400 billion that earlier this year the two firms announced they were preparing to sign (OGJ Online, Apr. 30, 2014).
The contract signing in Shanghai by Alexey Miller, Gazprom management committee chairman, and Zhou Jiping, CNPC chairman, was in the presence of Russian President Vladimir Putin and Chinese President Xi Jinping.
The contract stipulates that 38 billion cu m/year will be supplied from Russia to China. It includes provisions for a price formula linked to oil prices and a take-or-pay clause.
Gas will be delivered via the Power of Siberia trunk line encompassing the Yakutia and Irkutsk production centers designed for supplying gas to Russia’s Far East and China.
Gazprom’s Miller called it “the biggest contract in the entire history of the USSR and Gazprom” and that more than 1 trillion cu m will be supplied during the contract period.
Gazprom said $55 billion will be invested in the construction of production and transmission facilities in Russia.
Gazprom and CNPC in 2009 signed a framework agreement on major terms and conditions of gas supply from Russia to China, and in 2013 signed an agreement on major terms and conditions of pipeline gas supply from Russia to China via the eastern route.