June 7, 2017 / 1:32 PM / 4 months ago

Russia-China talks over new gas routes stalled - sources

MOSCOW, June 7 (Reuters) - Talks over new routes for gas supplies to China from Russia have stalled while Beijing rethinks the balance of its energy needs, including how much liquefied natural gas (LNG) it might use, two Russian sources familiar with the matter told Reuters.

Gazprom, which is already building a gas pipeline from Eastern Siberia to China - the Power of Siberia - was in talks over two more routes: the so-called western gas route and a gas pipeline from the Pacific Island of Sakhalin.

“The Power of Siberia-2 (the western route) and the Sakhalin pipeline - there are no moves. There are a lot of factors and they (China) are not yet ready to take any decisions,” a source familiar with the Russia-China energy talks said.

A Gazprom source also said there were no developments on the two pipelines, whose combined capacity, if built, is seen adding up to another 40 billion cubic metres (bcm) in possible gas supplies from Russia to China per year.

The Power of Siberia pipeline, expected to be launched by the end of the decade or in the early 2020s, should bring 38 bcm to China per year. Gazprom managed to clinch the Power of Siberia deal after ten years of painstaking talks with Beijing.

Neither Gazprom nor state-owned China National Petroleum Corporation (CNPC) immediately responded to requests for comment.

According to BP’s energy outlook to 2035, the share of pipeline gas supplies to China, including from Russia, will remain largely unchanged over the ten years from 2025, with the share of LNG and China’s own gas output significantly rising.

“We don’t see a room yet for (additional) pipeline gas from Russia to China except from the already signed Power of Siberia contract (before 2035),” Vladimir Drebentsov, head of Russia & CIS economics at BP, told Reuters. (Additional reporting by Aizhu Chen in Beijing; Writing by Katya Golubkova; Editing by Mark Potter)

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