Ruble Yuan Trade agreement placed by China and Russia for making Gas Payments.
Russian roubles and Chinese yuan will be used to pay for Russian natural gas exports to China under a number of agreements inked on Tuesday by state energy goliaths Gazprom and China National Petroleum Corporation (CNPC), according to Gazprom.
The agreements strengthened an energy alliance at a time when relations between Russia and the West over Ukraine and other issues were tense.
They were in addition to a February agreement between them to increase gas supplies starting in 2023 via the eastern route of a China-Russia pipeline.
In a statement published on its website, Gazprom CEO Alexei Miller claimed that accepting payments in both Chinese yuan and Russian roubles would be “mutually beneficial” for both his company and China’s state-owned CNPC.
Vladimir Putin, the president of Russia, stated on Wednesday that China would pay Gazprom for its gas using a 50/50 split of roubles and yuan.
The linear portion of the gas pipeline connecting the Kovyktinskoye field in the Irkutsk region to the Chayandinskoye field in Yakutia, according to Gazprom, which has a monopoly on Russian gas exports by pipeline, is almost finished.
Before the end of 2022, Gas from the Kovykta field was anticipated to flow to Power of Siberia, according to the business.
According to the firm, “Gazprom will ensure the performance of its contractual duties to expand the volume of gas shipments to China in 2023.”
A 30-year agreement between China and Russia for the provision of 10 bcm of gas annually was struck in February.
According to Gazprom, the major technical specifications for delivery have been established, and design work on the gas pipeline has begun.
By sending liquefied natural gas and its Power of Siberia pipeline, which started pumping supplies in 2019, Russia already transfers gas to China (LNG). In 2021, it sent China 16.5 billion cubic metres (bcm) of gas.
According to previously developed plans, Russia would raise the annual gas transmission via the pipeline to China from 5 bcm in the first year to 38 bcm by 2025.
The parent company of PetroChina, CNPC, announced on Wednesday that it has reached a deal with Gazprom on the Power of Siberia gas pipeline, but it made no more mentions.
The foreign and commerce ministries of China were unavailable for comment right away.
Executives from Gazprom and CNPC spoke via video conference at the Eastern Economic Forum 2022.