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Power of Siberia-2 Deal Held Up by China Price Demands: FT

NATGAS

Sources suggest negotiations for a Russia-China Power of Siberia-2 gas pipeline deal have run aground as Russia sees unreasonable demands on price and supply levels from China according to Reuters citing the Financial Times.

  • China would only commit to a deal for a small fraction of the 50bcm of annual capacity and is looking for prices close to Russia's heavily subsidised domestic levels.
  • China has been reported to be holding out for deep discounts to consider the project, knowing Russia has few other options for the volumes.
  • Russian Deputy Prime Minister Alexander Novak was reported last month to have said that Russia and China expect to a sign a contract on the pipeline “in the near future".

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