Over July 31 to August 1, within the framework of the Agreement for Strategic Cooperation between Gazprom and China National Petroleum Corporation (CNPC), St. Petersburg hosted the 4th meeting of the Joint Coordinating Committee (JCC) between Gazprom and CNPC.

Moderating the meeting were the JCC Co-Chairmen – Alexander Ananenkov, Deputy Chairman of the Gazprom Management Committee and Zhou Jiping, Vice President of CNPC. The JCC meeting was preceded by a meeting of the Joint Working Group between Gazprom and CNPC.

The participants underscored that since the 3rd meeting there had been onward development of the cooperation in the directions set out in the Agreement. Among other things, the parties had progressed in matters surrounding prospective natural gas supply from Russia to China, signing in March 2006 the Protocol on Natural Gas Supply from Russia to the PRC. To that end, the meeting pointed to the key significance of the commercial talks underway between Gazprom and CNPC.

The JCC Members underlined substantial deepening of cooperation in the provision of engineering services for underground gas storage and upstream facilities in the PRC. So far, Gazprom and CNPC have inked and currently implement a series of contracts in this sector. Moreover, the companies have created and launched the activity of a Group for Science & Technology Cooperation.

The participants also highlighted the big potential for interaction in such areas as joint involvement in hydrocarbon exploration and production in third countries, industrial safety, promotion of oil and petroleum products trading, and tasked both companies’ specialists to perform a comprehensive study of cooperation options.

The 5th JCC meeting is slated for the 4th quarter of 2006 in China.

Reference:

Currently making up 2 per cent in China’s primary energy mix, the share of natural gas may grow to 10% within the next 5 years. Natural gas will be used in China’s residential sector as industrial fuel and feedstock for the chemical industry as well as for power generation purposes.

Being China’s largest 100%-state owned oil and gas business, China National Petroleum Corporation (CNPC) is a leading integrated oil and gas company of the world.

Incorporated in 1998 on the platform of the Oil Industry Ministry of the People’s Republic of China, CNPC is comprised today of companies catering for oil & gas exploration, development, production, transmission, storage as well as oil refining, petrochemicals and research. CNPC is the largest crude oil producer & supplier and retains a dominating position in oil & gas production, processing and marketing in China. CNPC and its subsidiaries supply 79% of the domestic oil market, control 95% and 40% of the PRC’s natural gas and petroleum markets, respectively, and are involved in 27 international projects.

Gazprom and CNPC sealed an Agreement for Strategic Cooperation on October 14, 2004 in Beijing within the official visit of the Russian Federation President Vladimir Putin to the PRC. The Agreement covers a wide spectrum of joint businesses including scrupulous discussion of issues relative to the organization of Gazprom’s natural gas deliveries to the PRC. To steer the Agreement implementation, the parties set up a Joint Coordinating Committee. The Committee resolved to set up a Joint Working Group as well as working groups for major joint businesses. The 3rd meeting of the Joint Working Group and Joint Coordinating Committee took place in December 2005 in China.

On March 21-22, within the official visit of the Russian Federation President Vladimir Putin to the PRC, Gazprom and CNPC inked a Protocol on Natural Gas Supply from Russia to the PRC, fixing major accords on the gas supply timing, amount and routes (Eastern and Western), and gas pricing formula principles.