Moscow is negotiating with Beijing a "realistic price" of $350/1,000 cubic meters for Russian gas, while China is offering $235/1,000 cu m, the Russian Gas Society Tuesday quoted its head Valery Yazev as saying.
The price of $350/1,000 cu m is "a very realistic price and our Chinese colleagues are to admit it's a fair price and agree on it," Yazev said. "All the more so, as the European price is forecast to exceed $400/1,000 cu m in the near future, according to specialists' estimates," he said.
Yazev, who is also a deputy chairman of the State Duma, the lower chamber of Russia's parliament, was speaking at a Moscow-Beijing video conference Monday.
Yazev said he believed it was not a big failure that Russian gas giant Gazprom and China's National Petroleum Corp. had failed to sign the gas contract during the St Petersburg International Economic Forum last week, as initially expected.
"Two such big companies as CNPC and Gazprom can afford an opportunity to have their clear positions and defend their interests," he said.
Yazev said that Russia and China have no choice but to cooperate. "Russia has no problems with markets. Gas demand in Europe is estimated to grow by 150 Bcm from the current level, while European gas production will reduce," he said.
At the same time, "China will need [to import] around 250 Bcm/year of gas by 2030," he said. "So it has no other option but cooperate with Russia," Yazev said.
According to the International Energy Agency, China's gas consumption will slightly more than double to 260 Bcm by 2016 and rise further to 635 Bcm/year by 2035.
Russia-China talks over the gas price have dragged on for years and the two sides have previously indicated that they had hoped to agree on the price formula before Chinese President Hu Jintao's visit to Moscow last week.
Russian officials had previously not ruled out the possibility that a contract might be signed in St Petersburg. Hu visited Moscow for bilateral talks on Thursday and then attended the St Petersburg Forum Friday.
On Friday, Russian Energy Minister Sergei Shmatko said 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, adding that the price issue is still the key stumbling block.
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.
On Monday, Gazprom CEO Alexei Miller said the parties will hold the next round of talks on a gas supply deal with CNPC after its annual shareholders' meeting on June 30 and there is a "good chance" the deal will be closed by the end of the year.
Medvedev said if a deal is reached by the end of the year, gas supplies can still begin by the end of 2015, which is when supplies were to begin if the deal had been reached by the previous target of the end of June.
