As Russian president Vladimir Putin prepares to visit China, state-controlled Gazprom looks to be putting the finishing touches on a long-awaited gas supply contract to China. Negotiations have been ongoing for more than a decade, with price reportedly being the main sticking point. Chinese companies reluctant to pay European prices for Russian natural gas held out for a more attractive offer from Gazprom.

It will be interesting to see how the Chinese price compares to European contract prices, assuming the deal actually gets done this time. Additionally, if a deal with China is struck, it could mean movement on marketing gas from the ExxonMobil-operated Sakhalin 1 oil project. Exxon has wanted to export the gas to China for some time, but Gazprom has other ideas.

“We hope that the negotiations will be completed as scheduled,” Russian Deputy Energy Minister Anatoly Yanovsky told reporters. “The contract is, I would say, 98 percent ready.” – Reuters