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Gazprom and CNPC sign Memorandum of Understanding on underground gas storage and gas-fired power generation

June 25, 2016, 14:55

Alexey Miller, Chairman of the Gazprom Management Committee, and Wang Yilin, Chairman of the Board of Directors of CNPC, today signed in Beijing a Memorandum of Understanding in the field of underground gas storage and gas-fired power generation.

The signing ceremony was attended by Vladimir Putin, President of the Russian Federation, and Xi Jinping, President of the People's Republic of China.

According to the document, the signatories intend to explore the prospects for cooperation in building underground gas storage (UGS) and gas-fired power generation facilities in China.

The parties will analyze and assess the geological, technological, and economic conditions for creating UGS facilities in Heilongjiang, Jiangsu, and Zhejiang. A joint venture will be set up to implement UGS-related projects. By late August, the parties will examine and select target projects in the field of gas-fired heat and power generation from among those offered by CNPC in order to make an investment decision and choose an organizational and legal framework for projects to be executed.

“The Russian-Chinese dialogue in the gas sector is crossing into new territory. Our cooperation in the field of underground gas storage and power generation will help deepen the relationship between the companies and considerably improve the environmental situation in China,” said Alexey Miller.

Background

CNPC is China's state-owned oil and gas company and one of the world's leading integrated energy companies.

In 2014, Gazprom and CNPC signed the Sales and Purchase Agreement for gas to be supplied via the eastern route (Power of Siberia gas pipeline). The 30-year Agreement provides for Russian gas deliveries to China in the amount of 38 billion cubic meters per year.

In 2015, Gazprom and CNPC inked the Heads of Agreement for pipeline deliveries of natural gas from Russia to China via the western route (Power of Siberia 2 gas pipeline). At the initial stage, 30 billion cubic meters of gas is planned to be annually delivered from Western Siberian fields.

Also in 2015, Gazprom and CNPC signed the Memorandum of Understanding for the project of pipeline gas supplies to China from the Russian Far East.

Gazprom has considerable experience in building and operating underground gas storage facilities both in Russia and abroad.

 

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