A leading Chinese energy expert said in Beijing Tuesday that he was confident that Moscow and Beijing would soon reach final agreement on the supply of Russian gas to China.
However Xia Yishang, director of Beijing's Center for Strategic Energy Studies, declined to put any firm date on the start of actual deliveries. Nor did he state how much gas Russia might be willing to supply to China. Russia's official Eastern Gas program envisages the supply of 25 billion-50 billion cubic meters of Russian gas by pipeline to China and South Korea from 2020 onward.
"We think supply of natural gas through pipeline from Russia to China will be realized very soon," Xia told a conference on Sino-Russian-Kazakh energy relations. He then added: "There are various problems in Russia-China cooperation -- but we can always cut a deal."
He also said that the governments in Beijing and Moscow had the power to override any concerns their energy companies might have about striking such a deal. China's CNPC is understood to be wary about purchasing gas from Russian fields in Western Siberia that might also be able to feed their gas to European markets, arguing instead that Russia should agree that supply should some from fields further East that would be specifically dedicated to serving the Chinese market.
"The companies concerned are state-owned, so they have to listen to their governments to some degree. I firmly believe that although there will be problems, cooperation will continue and prospects for energy cooperation are very interesting," Xia said.
Julian Lee, senior analyst at the Centre for Global Energy Studies in London, considered that Beijing was in a stronger position than Moscow in terms of securing a gas agreement on terms favored by China. He argued that if China could get agreement on Russian gas, it would adopt plans and programs that use that gas; if it could not, it would adopt plans that did without.
Vladimir Padalko, of the Russian Chamber of Commerce and Industry in East Asia, told the conference that Russia's overall foreign trade would not be too seriously affected were the European Commission to prevent Russian energy companies from adding downstream capacity in the European market to their existing upstream and supply capacity.
"If Europe put its stick in and halted the move of Russian companies into the European market, this would only impact 2-4% of the Russian foreign trade turnover," Padalko said.
Sergey Lukyanov, a trade analyst with TNK-BP, said Russia was expanding its ability to move its oil to market. The Russian state oil transport monopoly, Transneft, currently possessed the ability to handle some 280 million mt of export crude a year (around 5.6 million b/d), but was in fact only handling 244 million mt. By 2015, Lukyanov said, Transneft would be handling some 292 million mt/year of actual exports while retaining a further 94 million mt in spare capacity.
