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Gazprom and China meeting covers natural gas supplies

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World Pipelines,

A working meeting between Alexey Miller, Chairman of the Gazprom Management Committee, and Zhang Gaoli, First-ranked Vice Premier of the People's Republic of China, took place in Beijing on 25 September.

The meeting addressed a wide range of issues pertaining to strategic co-operation. Particular attention was paid to Russian gas exports to China, especially the progress in the establishment of the eastern route and the prospective project for gas supplies from Russia's Far East.

Also, a working meeting was held between Alexey Miller and Wang Dongjin, Vice President of CNPC and President of PetroChina. The parties discussed the arrangement of gas exports from Russia's Far East to China and reaffirmed their commitment to set out the modalities by the end of this year.

The meetings also touched on such subjects as the project for gas deliveries via the western route and joint efforts regarding gas storage, gas-fired power generation, and the use of natural gas as a vehicle fuel, including through the development of the Europe – western China international transport route.

As noted by Alexey Miller: “since early 2017, China's gas demand has grown significantly; according to the latest data, in January - July alone gas consumption in China added 16% compared to the same period of last year. That growth is mainly caused by the campaign for converting industrial consumers from coal to natural gas in order to fight air pollution in China. Seeking to meet the demand, China increases its gas imports considerably. In January - July, gas imports totalled 51 billion m3, an increase of 20% or 9 billion m3, in the span of six months. The share of imports in the country's gas balance is rising; it is currently at 38%. Faced with some volatility in pipeline gas supplies from Central Asia – certain countries did not deliver in January - April; LNG procurements exhibited growth, including under spot contracts, of 140%.

China's stated aims for gas industry development up to 2020 (with the share of gas in the energy mix reaching 8 - 10% and UGS capacity doubling), coupled with CNPC revising upward its forecasts for gas consumption up to 2030 (620 billion m3 compared to last year's forecast of 510 billion), create great potential for deepening co-operation with Gazprom.”

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