China to pay about $390 for Russian gas

As the gas price in the $400 billion Russia-China deal hasn’t been officially announced, Konstantin Simonov, general director of Russia’s National Energy Security Fund, said it would be about $390 per 1,000 cubic meters.
“In the end, I think, we got a very good price,” Simonov told RT on the sidelines of last week’s St. Petersburg Economic Forum.
Simonov thinks that the widely reported sticker price of $350 per 1,000 cubic meters is a simple oversimplification of the minute details of the $400 billion gas deal under which Gazprom will supply China with 38 billion cubic meters (bcm) of natural gas over the next 30 years.
Simply dividing $400 by 38 bcm over the 30-year time period doesn’t take into account the full scope, Simonov said.
Under the contract, supplies of Russian gas via the Eastern route will reach the full capacity of 38 bcm a year only after the fifth year of supplies. During the first five years deliveries will only be 16 bcm annually, Simonov explained.
This means that the total gas supply will exceed a trillion cubic meters and the price will come closer to $390, RT reports.
China to pay about $390 for Russian gas China to pay about $390 for Russian gas Wednesday, May 28, 2014 Rating: 5
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