Multi-billion dollar Russia and China gas project a done deal

Both sides don’t agree on prices, however.

China National Petroleum Corporation (CNPC) and Russia’s Gazprom, their nation’s leading oil and gas monopolies, signed a number of agreements and basic conditions for the long-term deal on energy cooperation yesterday.

Under the afreement, Russia will supply 38 billion cubic meters of gas per year to China. Gazprom said the deal is expected to be finalized by the start of 2014. The project also provides for the construction of a new Russian pipeline to China by 2018.

The terms cover the start date and volume of gas deliveries; the take-or-pay level and the amount of guaranteed payments, among others. The companies, however, didn’t specify a solution to the most contentious issue: price.

Over the years, both, sides have failed to agree on the issue of price, prompting China to sign massive gas deals with other exporting nations such as Australia, Qatar and Turkmenistan.