Prospects for Russia-China gas deal dim during Xi visit
MOSCOW/ST PETERSBURG (REUTERS) - Prospects are dim for a Russia-China pipeline gas deal next week during a visit to Moscow by China's new president, Xi Jinping, as each side remains unmoved by the other's demand for price concessions, gas industry sources said.
"We expect that our positions will converge on the contract terms," Gazprom spokesman Sergei Kupriyanov told Reuters. "We are not preparing to sign anything."
Russia and China appear to be natural partners when it comes to trade in raw materials, but they have failed so far to seal a gas supply deal over nearly two decades, largely because Russia would not cut its price to levels within reach of Chinese end-users, who are highly sensitive to input cost inflation.
A Russian gas industry source said the Chinese price position remained fixed at US$250 (S$312) per thousand cubic metres, while Gazprom's price demand hovered around US$300, although its hand has been weakened by falling prices around the world in the wake of the US shale revolution.