Russia's Gazprom to supply China with gaz

Russia's Gazprom, the world's top natural gas producer and exporter, wants to have a deal to supply China with gas within a year, a senior company executive said Wednesday.

"We are carefully considering the economics of this supply," said Gazprom Deputy Chief Executive Alexander Medvedev. "I believe we will be in a position to negotiate the delivery terms, volumes, timing and pricing, which is most important for us, in the nearest future."

Medvedev said during a press briefing in Beijing that demand for imported gas in China was projected to hit between 20 to 30 billion cubic meters per year between 2010 and 2015, the AP informs.

"The delivery could start as early as 2010, maybe a little bit later," he said. "So it is necessary to fix the sale agreement by the first half of next year" at the latest.

Chinese leaders are trying to clean up the country's smog-shrouded cities by shifting reliance from oil and China's abundant coal to cleaner natural gas.

China now produces 40.8 billion cubic meters of natural gas a year and is expected to consume 200 billion cubic meters a year by 2020, the government has said.

Medvedev also said the state-controlled company was committed to investing as much money as necessary to supplying gas to China. He said there was "no limitation" either from the company's own resources or the capital markets on funding any China-related projects. Any projects Gazprom is involved in "will be financed in the best possible terms," he said.

There was no immediate response from China.

The Russian firm already has a strategic cooperation agreement with China National Petroleum Corp., or CNPC, inked in October 2004 involving Russian natural gas supply to China.

Gazprom and CNPC are currently looking at two options for piping gas into China, an east or a west route, he said.

Medvedev said a conservative estimate of the export potential to China and the region from its eastern Siberia and Sakhalin fields is about 65 billion to 75 billion cubic meters a year.

Gazprom is also currently ironing out a framework agreement to cooperate with China Petroleum & Chemical Corp., or Sinopec, he said.