China and Russia Sign Natural Gas Price of 400 Billion Yuan Near European Level

The 10-year Sino-Russian gas negotiations finally settled. On May 21, 2014, the two sides agreed that starting from 2018, Russia will start supplying gas to China through the East China-Russia gas pipeline. The volume of gas transmission will increase year by year, eventually reaching 38 billion cubic meters per year. The cumulative contract period will be 30 years. .

The price issue that has attracted much attention has not been announced, but the market estimates gas prices, or similar to European prices, will not be as cost-effective as Central Asia, which will generally increase the cost of natural gas in China.

"Energy is crucial to Russia's economy and accounts for about 70% of total exports. The Ukrainian crisis has caused Russia's traditional energy market to gradually shrink. It needs to find new markets to diversify its exports." Xiamen University, China Energy Lin Boqiang, director of the Center for Economic Research, told reporters.

China, which is undergoing haze management and energy structure adjustment, also needs to import more natural gas. The National Development and Reform Commission proposed that by 2020, China's natural gas supply capacity should reach 400 billion cubic meters, and strive to reach 420 billion cubic meters. And 38 billion cubic meters, equivalent to 21% of China's apparent consumption in 2012, is equivalent to almost three Beijing's natural gas consumption in 2013.

According to the contract, the main source of gas supply is the Keweikejin gas field in Irkutsk Region in East Siberia, Russia, and the Chayan Gold Field in the Republic of Sakha. The target markets are mainly in Northeast China, Beijing-Tianjin-Hebei, and Yangtze River Delta regions.

Zhuo Chuang Wang Xiaokun, an information natural gas analyst, believes that this pipelining is beneficial to the advancement of the process of converting gas from the northeast to gas to coal gas. While benefiting pipeline equipment companies and gas companies, CNPC will further increase its ratio of gas sources.

“It is expected that the pipeline gas prices agreed between the two sides will be around 1.9-2.4 yuan/cubic meter. Compared with the national civil gas price area, there is an inverted price, and the overall cost of natural gas in China will increase,” said Wang Xiaokun.

However, Lin Boqiang believes that with the advancement of natural gas price reform, the price of natural gas in China will surely rise, and the linkage with imported gas prices will also be smoother. When the real gas supply is implemented in 2018, domestic gas prices will not necessarily be lower than imports. Gas price.

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