Go slow: planned gas links between Russia and China have been put on hold until a pricing deal can be worked out
Price row freezes Russia-China pipe
Russia has put plans to build gas pipelines to China on hold indefinitely because it still cannot reach a pricing deal with Beijing, Russia's gas export monopoly Gazprom said, adding that a drop in demand may force it to push back plans for the giant Kovykta field.
"No one is talking about gas supplies to China in 2011 anymore," Reuters quoted Gazprom deputy chief executive Alexander Ananenkov telling a news conference.
The statement came as Russia's President Dmitry Medvedev and Prime Minister Vladimir Putin met Chinese President Hu Jintao during his state visit to Russia.
Pricing has been the main stumbling block at talks since Moscow and Beijing agreed to build two pipelines to ship up to 80 billion cubic metres of West and East Siberian gas to China at the start of this decade.
China has since then agreed to buy gas from the former Soviet republics of Kazakhstan and Turkmenistan, with supplies due to begin in the next few years.
Analysts told Reuters the deals give Beijing an upper hand at talks with Gazprom and hinder the Russian gas behemoth's desire to diversify away from the European markets, of which it already controls one quarter.
Ananenkov also said a decline in demand in Russia and abroad because of the global economic crisis may prompt it to postpone the launch of the giant East Siberian Kovykta gas field until after 2017.
Gazprom wants to buy Kovykta from BP's Russian venture TNK-BP but talks have dragged on for the past two years also because the two sides cannot agree on the price.
Gazprom's export boss Alexander Medvedev told the same news conference the two sides were currently not holding active talks about Kovykta.
Ananenkov said Gazprom's talks with US supermajor ExxonMobil about gas purchases from the Sakhalin-1 field were progressing well but did not give details.
ExxonMobil's plans to export gas from Sakhalin-1 to China have been on hold for years after Gazprom said it wanted to buy gas from the field for Russia's domestic use.