MOSCOW, May 21 (RIA Novosti) – A contract signed by Russian energy giant Gazprom and China National Petroleum Corporation (CNPC) on gas deliveries to China via an eastern route includes a take-or-pay provision, Gazprom said Wednesday.
“The contract was signed on mutually beneficial conditions, and includes such basic conditions as the price formula pegged to the oil basket and a 'take-or-pay' provision,’” the company said in a press release.
Gazprom and CNPC signed a 30-year contract on Wednesday for the sale of Russian gas to China at a volume of 38 billion cubic meters per year with delivery along the eastern route. The deal is estimated to be worth $400 billion.
The document was under discussion for several years with the main stumbling block being the gas price, which the parties finally agreed on during a two-day visit of Russian President Vladimir Putin to China.
Putin earlier said that Russia was planning to invest $55 billion and China around $22 billion in the gas deal. He added that the price for gas would be tied to the price of oil and oil products.
The first gas deliveries to China from Russia may begin in the next four to six years, with an advance for the supplies optionally possible at a cost of $25 billion, Russian Energy Minister Alexander Novak said Wednesday.