China and Russia failed to finalize a long-expected gas supply agreement at a meeting of their two presidents in Moscow despite a pledge to boost their bilateral trade, particularly in the energy sector.
Chinese President Hu Jintao said the two countries had agreed to boost bilateral trade to $100 billion by 2015 and to $200 billion by the end of the decade, particularly in the energy sectors.
A stepped-up trade relationship would provide new impetus to economic growth in both countries and would cover energy, nuclear energy, aerospace and technology, Hu said to loud applause at the opening ceremony of the St Petersburg economic forum.
"In particular, we will expand cooperation in new energy, new materials, in bio and nano technology and in green, emerging industries," the Chinese leader said.
Russian President Dmitry Medvedev said in his welcoming address that the partnership between Russia and China "made the world a more stable place." However, neither leader referred to their failure at a meeting in Moscow a day earlier to finalize an already delayed gas agreement.
Russian Energy Minister Sergei Shmatko told reporters in St Petersburg that the two sides would continue the talks to try to find a mutually acceptable agreement.
"I think there had been a very good opportunity to sign the contract during the visit [of Hu to Moscow]," he told reporters on the sidelines of the forum.
"Nonetheless, the heads of the state have said the parties should be mutually flexible and we believe [the governments] should not interfere in the process," Shmatko said.
NO TIMEFRAMES
Asked if he could provide new timeframes for the completion of the talks, Shmatko said that the important thing was to find a mutually acceptable solution for such a unique, major contract and it would be wrong to set deadlines.
The talks will continue, with the gas price remaining the key stumbling block, the Russian minister said.
Gazprom CEO Alexei Miller, when asked how significant the differences in approaches by the parties are, said: "We are speaking about principles, based on which the market is to work."
"We are to set up a model for decades to come," he said at the sidelines of the forum.
The Asian market uses Japan's oil basket rather than Brent and "the formula is different, of course," he said, without elaborating.
Medvedev said after talks with Hu in Moscow on Wednesday that the documents on future supplies of natural gas to Russia were being finalized, indicating a delay in the long-expected signing of the gas supply contract.
"We have gas agreements on western and eastern routes. These are our near-term plans. At present, the documents related to [future] gas supplies to China, are being finalized," Medvedev was quoted by Russia's RIA Novosti news agency as saying at a briefing after the talks with his Chinese counterpart.
Negotiations over the gas price have dragged on for years and the two sides have previously indicated that they hoped to agree on the price formula before Hu's visit to Moscow and Russian officials had previously not ruled out the possibility that a contract might be signed in St Petersburg.
Moscow and Beijing signed an initial agreement on gas supplies in 2006, when they agreed to build two gas pipelines. The so-called Altai pipeline system would comprise an eastern and a western route, through which nearly 70 Bcm of gas could be exported to China.
In September 2010, Gazprom and CNPC signed a legally binding agreement on the supply of up to 30 Bcm/year of Russian gas to China.
At the time, both sides were hoping to reach an agreement on the gas price by the middle of 2011 and sign a commercial contract by July with supplies starting in 2015.
"These are strategic documents designed for decades to come," Medvedev was quoted as saying in the Kremlin after the talks, adding that he was confident that the planned targets would be met as they "meet interests of the both countries," the report said.
The deal would provide China with stability and the possibility to make long-term plans based on the agreements, Medvedev said.
