Russia cheers China deals

City A.M. Reporter
RUSSIAN energy companies signed a slew of deals with China yesterday, seeking to lock in sales to fund costly production and pipeline projects that will direct exports away from Europe to Asia.

The agreements, announced during a visit by Prime Minister Dmitry Medvedev to Beijing, brought Igor Sechin, chief executive of state oil major Rosneft, closer to his goal of exporting more than 1m barrels per day (bpd) of oil to China.

Independent gas producer Novatek secured a long-term contract to supply liquefied natural gas, ahead of the expected lifting of state-controlled Gazprom’s export monopoly on LNG exports next year.

Gazprom, the world’s largest gas company, made modest progress towards supplying pipeline gas to China but will fail to seal a deal before its Russian rivals can compete for exports.

Medvedev hailed Rosneft’s outline agreement to pump 200,000 bpd of crude oil over 10 years to China’s Sinopec Group, in a pre-paid deal valued at $85bn (£52.4bn).