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China to Pay for Russian Gas in US Dollars Russian Energy Minister

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Payments under a $400 billion contract signed Wednesday between Russian gas giant Gazprom and China’s CNPC will be made in US dollars, Russian Energy Minister Alexander Novak said on the sidelines of the St. Petersburg International Economic Forum on Friday.

ST. PETERSBURG, May 23 (RIA Novosti) – Payments under a $400 billion contract signed Wednesday between Russian gas giant Gazprom and China’s CNPC will be made in US dollars, Russian Energy Minister Alexander Novak said on the sidelines of the St. Petersburg International Economic Forum on Friday.

The Russian Finance Ministry is currently working on the issue of transferring accounts of export goods into rubles because of Western sanctions against Russia over the situation in Ukraine and Crimea.

Many of Russia’s partners, including China, use the ruble in trade, but most export contracts are fulfilled in dollars.

The 30-year contract provides for the sale of Russian gas to China at a volume of 38 billion cubic meters per year with delivery via an eastern pipeline. According to Gazprom CEO Alexei Miller, the value of the entire contract is $400 billion, though the contract price for gas has not been revealed yet. Experts say it could exceed analyst estimates of $350 per thousand cubic meters

Under the deal, Russia’s overall investment on delivering gas to China is $55 billion and China’s investment is estimated at around $22 billion.

Earlier Friday, Gazprom reached a preliminary agreement with China on the advance payment of $25 billion for the gas deliveries under the new contract.

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CNPC, Gazprom, Alexander Novak
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