Gazprom sees contract with China on gas supplies from Far Fast in 2018

Russian energy giant Gazprom is in talks with China on natural gas supplies from Russia’s Far East, and a contract on deliveries of the fuel is planned to be signed in 2018, Gazprom said on Thursday.

The project was discussed by Gazprom CEO Alexei Miller and China National Petroleum Corp Chairman Wang Yilin in Beijing on Thursday, Gazprom said in a statement.

In 2014, Gazprom signed its first contract with China. According to the contract, Gazprom will supply 38 billion cubic meters (bcm) of natural gas annually from Eastern Siberia to China for 30 years, starting from December 2019, news site ifeng.com reported.

The negotiations involve a 30-year contract, supplying at most 30 bcm of natural gas from Western Siberia and around 8 bcm of natural gas from Russia’s Far East every year, it said.

China’s natural gas consumption grew fast in the first 11 months of this year because of strong demand from industry and winter heating needs.

Consumption increased 18.9 percent year-on-year to 209.7 bcm during the period, said the National Development and Reform Commission.

Some cities in China are experiencing a widespread natural gas shortage because of a government program that mandates the use of natural gas instead of coal during the winter heating season.

Measures have been taken to tackle the issue. On Thursday, Wuhan Natural Gas Co in Central China’s Hubei Province announced a natural gas purchase limit of 150 cubic meters per household per month.

China’s major State-owned oil companies have also been told to maximize production at domestic gas fields, the Xinhua News Agency said.

Imports of natural gas rose fast in the first 11 months, with the figure at 60.7 million tons, an increase of 26.5 percent year-on-year, according to official data.