China reached an initial agreement on pricing and supply for natural gas from Russia, energy chief Zhang Guobao said, the Xinhua news agency reported. China will boost the use of the cleaner fuel and the development of new energy in its five-year plan through 2015, Zhang was quoted as saying in an interview with Xinhua late Tuesday. The country will improve energy cooperation with foreign countries, it said.
Gazprom confirmed that “mutual understanding on basic principles of pricing and terms of supplies” has been reached. “The talks on detailing the terms are continuing,” Gazprom’s press service said in an e-mailed comment. The Chinese economy, which expanded at the fastest pace in the fourth quarter since 2007, will grow four times faster than the United States in 2010, the United Nations said in December. China agreed in February last year to provide Russia with $25 billion of loans in return for 20 years of crude oil supplies as domestic energy demand rises.
Russia will miss a 2011 target to ship its first pipeline gas to China. Gazprom has used its monopoly control of exports to delay construction of gas links to that country and South Korea while seeking to agree on prices and routes. Gazprom now aims to ship fuel to China by 2014 or 2015 from fields in western and eastern Siberia. Gazprom eventually plans to supply as much gas to Asia as it does to Europe now. Pipeline supplies may reach 70 billion cubic meters a year, Gazprom CEO Alexei Miller said in Beijing last October.
China also plans to start importing Russian crude oil through a cross-border pipeline now being built, Xinhua quoted Zhang as saying. The country’s electricity imports from Russia may increase by 25 percent to 1 billion kilowatt-hours in 2010, according to Zhang. The country will continue to import liquefied natural gas to the southern province of Guangdong as demand of the cleaner-burning fuel rises, Zhang said.
The government will add to its emergency stockpiles of crude oil to ensure energy security, he said. The country has started building tanks as the second phase of a project in Xinjiang and Lanzhou in the northwest, according to Zhang.
Construction of stockpiling facilities in other places will begin in the next two years, Zhang said, without elaborating.