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Gazprom deal means natural gas set to flow across border

(China Daily)
Updated: 2009-10-14 07:46

China and Russia signed a framework agreement yesterday that could see a steady flow of natural gas into energy-hungry China from its resource-rich neighbor.

The deal was among a slew of trade and military agreements signed during the visit of Russian Prime Minister Vladimir Putin.

The deal between Russia's state-run natural gas monopoly, Gazprom, and China National Petroleum Corp calls for the supply of about 70 billion cubic meters of gas a year, but a price had not been set and no contract signed, said Gazprom's Chief Executive Alexei Miller.

Media reports said the agreement was expected to be a gas-for-loans deal, similar to a $25 billion oil-for-loans deal completed earlier this year.

Russia's cash-strapped energy companies need Chinese funding, while Beijing has welcomed the chance to further diversify sources for energy needed to fuel its fast-growing economy. The global economic crisis and changing market conditions have further spurred cooperation after reduced demand from Europe encouraged Russia to diversify markets for its oil and gas.

The gas framework agreement was formally signed in the presence of Premier Wen Jiabao and Putin.

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