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Gazprom and CNPC address areas of strategic co-operation

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World Pipelines,

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Zhang Gaoli, Vice Premier of the State Council of the People’s Republic of China, took place on 15 February in Beijing.

The parties addressed key areas of strategic co-operation, expressing appreciation for the past and prospective collaboration between Gazprom and Chinese energy companies and financial organisations. Particular attention was paid to the projects for pipeline gas supplies from Russia to China.

Another working meeting was held on 15 February between Alexey Miller and Wang Yilin, Chairman of the Board of Directors of CNPC. The parties reviewed the progress of the project for gas deliveries from Russia to China via the eastern route, as well as the prospects for gas supplies via the western route and from Russia’s Far East. It was noted that the construction of the Power of Siberia gas pipeline (eastern route) was going according to schedule, with preparations underway for the construction of the cross-border section.

Alexey Miller and Wang Yilin underlined that the project for pipeline gas supplies from Russia’s Far East complemented and expanded the eastern route. Upon consideration of groundwork carried out on the main technical issues, the parties agreed to start commercial negotiations on the project.

The meeting also touched upon the construction of the Amur GPP. The parties concluded the final negotiations aimed at engaging China Petroleum Engineering & Construction Corporation (a CNPC affiliate) in the project under an EPC contract for the construction of a booster compressor shop and gas dehydration and fractionation units.

Alexey Miller and Wang Yilin discussed the progress in the development of projects in the field of natural gas storage and signed the Agreement to conduct geotechnical surveys for the creation of UGS facilities. Pursuant to the document, it is planned to assess the geological, technological and economic conditions for creating underground gas storage facilities within the Shenzhen 2-1 field (Heilongjiang province), Chuzhou salt caverns (Jiangsu province), Baiju aquifers (Jiangsu province), and in other areas.

The parties addressed the prospects for joint projects in the field of gas-fired power generation in China and decided to complete preparatory work in 2017 in order to make the investment decision with regard to a pilot project.

The parties resolved to establish within the Joint Co-ordinating Committee of Gazprom and CNPC a new working group focused on staff development and experience sharing.

Another co-operation issue addressed at the meeting was the use of LNG as a vehicle fuel along the Europe – China international transport route.

“The strategic partnership between Gazprom and CNPC continues to advance. I am confident that Gazprom’s unique experience and enormous capacities will help China with its ambitious plans to develop the national gas market and secure demand for natural gas as well. By 2020, the share of natural gas in China’s energy mix is expected to grow from 6 - 10%. According to the plan, the need for gas imports may double by late 2020, reaching 150 billion m3. As of today, we have an ongoing project with CNPC for gas supplies from Russia to China via the eastern route. The agenda is to complement it with another project for pipeline gas supplies from Russia’s Far East,” said Alexey Miller.

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