On 25 August, Beijing hosted the 6th meeting of the Energy Cooperation Subcommission, co-presided by Viktor Khristenko, Industry and Energy Minister of the Russian Federation and Ma Kai, Chairman of the State Development and Reform Commission of the People’s Republic of China. Attending the meeting on the part of Gazprom was Stanislav Tsygankov, Head of the Company’s Foreign Relations Department.
The Subcommission summed up the results of the work done over the past period as well as identified potential directions of interaction and expansion of cooperation between Russia and China in the oil and gas sector.
At the same time, the Subcommission positively evaluated the intensive work performed by Gazprom to solidify its relationships with the China National Petroleum Corporation (CNPC) and the SINOPEC Consortium, ending in a range of cooperation agreements.
At the end of the meeting the Subcommission resolved to explore in depth issues related to the preparation of an inter-governmental agreement on Russian natural gas deliveries to China.
“Cooperation in the gas industry with China’s leading oil and gas companies is a strategic and long-term objective for Gazprom. Entering into cooperation agreements with CNPC and SINOPEC will lay foundations for mutually advantageous cooperation and will establish favorable environment for Gazprom’s operations on the Chinese gas market,” - Stanislav Tsygankov was quoted as saying in the course of a meeting of the Oil and Gas Working Group.
Natural gas share in China’s energy and fuel balance currently accounts for 2%. This parameter is believed to grow to 10% over the nearest 5 years as a result of said inter-governmental agreement implementation. The gas to be extracted will be channeled as industrial fuel and feedstock to China’s residential sector, chemical industry and power generation sector.
The China National Petroleum Corporation (CNPC), the largest Chinese national oil and gas company (100%-owned by the State), is one of the world’s leading oil and gas production businesses.
Founded in 1998 based on the former Petroleum Industry Ministry of the People’s Republic of China, the CNPC is comprised nowadays of companies dealing with oil & gas exploration, production, transmission and storage, oil refining & chemistry and research.
The SINOPEC company, a vertically-integrated oil and gas corporation, is the second-largest Chinese business in turnover. In 2003, the company’s earnings totaled CNY 238 billion (some USD 29 billion). SINOPEC’s assets account for CNY 530 billion (USD 64.5 billion).
In 2003, SINOPEC produced 38.2 million tons of oil and 5.3 billion cubic meters of gas. SINOPEC is the largest business in Asia in the oil refining sector (over 125 million tons).
At the same time, the company is one of the leading oil and refined products importers to China. In 2003, SINOPEC’s overall foreign trade operations yielded USD 15.84 billion (first ranking in China), including USD 13.81 billion earned through imports.
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