China National Petroleum Corporation (CNPC) has said that China and Russian energy companies are in discussions over the development of oil and gas fields and the trade of hydrocarbons, reported Reuters.
At the St Petersburg International Gas Forum, CNPC vice-president Xie Jun said: “We are now discussing with Rosneft, Gazprom and Novatek questions on the joint development of oil and gas fields, widening the capacity of pipeline projects and trade of hydrocarbons.”
The minister said that CNPC and Gazprom are collaborating to expedite the delivery of Russian gas to China through the Far Eastern route, which contains the Power of Siberia pipeline.
Subsequently, Gazprom announced that it had inked a deal with PipeChina and CNPC to design and build a pipeline segment in the Far East.
The Power of Siberia pipeline began supplying Russian gas to China in December 2019, and by 2025, it is anticipated that the gas supply will reach the agreed-upon annual volume of 38 billion cubic metres (bcm).
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In February 2022, Gazprom signed a second contract to provide 10bcm of gas annually via the Far Eastern pipeline.
According to Gazprom CEO Alexei Miller, the energy company is gearing up to supply more gas to Kyrgyzstan, Kazakhstan and Uzbekistan in Central Asia, starting in 2024.
The news comes as Russia tries to make up for lost gas sales in Europe by building a new pipeline to China.
Russia and China have also been negotiating for years to develop the Power of Siberia-2, which would transport 50bcm of natural gas annually from Mongolia to China via the Yamal area of northern Russia.
However, industry experts doubt if a project so heavily reliant on a single customer will be worth the enormous expense due to the significant political risks involved.
In September 2023, Russia’s United Petrochemical Company and China’s Xuan Yuan Industrial Development reached an agreement to build a 5bn yuan ($685.41m) trans-shipment oil facility.