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Updated: November 18, 2010 15:35 IST

China, Russia still divided on natural gas price

AP
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Russian Prime Minister Vladimir Putin, left, and Chinese Premier Wen Jiabao shake hands after exchanging documents signed an agreement at the Great Hall of the People in Beijing on October 13, 2009. File photo: AP.
Russian Prime Minister Vladimir Putin, left, and Chinese Premier Wen Jiabao shake hands after exchanging documents signed an agreement at the Great Hall of the People in Beijing on October 13, 2009. File photo: AP.

China and Russia are still divided on the price of natural gas that Moscow would like to sell to its energy-hungry Asian neighbour, a senior energy official in Beijing said on Thursday.

Efforts by China and Russia to establish gas ties have been stalled for years, mainly because of disagreement over prices. While Russia is eager to link gas prices for China to oil prices in the way it does in Europe, China views any European-level prices as too high.

Gu Jun, deputy director general of the international cooperation department of China’s National Energy Administration, said the difference between the sides is now $100 per 1,000 cubic meters.

Mr. Gu said China hopes to narrow the gap during Premier Wen Jiabao’s visit to Russia next week.

“The two sides have made a lot of efforts but I have to tell you we are still largely divided on the pricing,” Mr. Gu told reporters. “We need to demonstrate sincerity on both sides to see whether we can push forward the negotiations.”

Moscow has said that Russia would like to supply China with all its natural gas needs. In September during a visit to Beijing, Russian Deputy Prime Minister Igor Sechin told reporters that Russia is in talks with Chinese partners on plans to launch natural gas supplies to China starting in 2015.

Russia is the world’s biggest energy producer and China is the world’s largest energy consumer, overtaking the United States last year.

Although Europe remains Russia’s largest export market for gas and oil, both Beijing and Moscow have been seeking to diversify their energy sources and markets, despite a long history of mutual suspicion and tensions.

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