05 September 2013, News Wires – China National Petroleum Corp, CNPC, had a busy day in Russia on Thursday, firming up a stake purchase in the Yamal liquefied natural gas project and penning an agreement with local giant Gazprom on gas imports to China.
The Chinese state-owned behemoth penned the legally binding agreement with Gazprom which outlines all the major terms and conditions regarding the pipeline supply of gas to China via the eastern route.
Russian President Vladimir Putin was joined by Chinese counterpart Xi Jinping for the signing ceremony in St Petersburg attended by Gazprom chairman Alexei Miller and CNPC chairman Zhou Jiping.
“All the major terms and conditions of future Russian natural gas supplies to the Chinese market via the eastern route were agreed on,” Gazprom said. These include the export volume and starting date, the take-or-pay level, the period of supply build-up and the level of guaranteed payments.
Pricing of the gas will not be linked to the Henry Hub index.
CNPC also firmed up its 20% stake purchase from Russian independent Novatek in the $20 billion Yamal LNG project. Novatek will hold a 60% stake with France’s Total in for 20%.
Yamal LNG is envisaged as a 16.5 million tpa scheme using gas from the giant South Tambeskoye field, which held proven and possible reserves of 907 billion cubic metres of gas as of 31 December 2012.
Construction of the three-train liquefaction project is due to be completed by the end of 2016, with first cargoes targeted for the following year.