Question: Dmitry Medvedev said today that that some new gas, energy and oil agreements are going to be reached soon. What was he referring to?
Arkady Dvorkovich: In the last two days, the Russian energy companies Gazprom and Rosneft have had very productive negotiations with their Chinese colleagues on various oil and gas projects. Some specific additional proposals were made by both sides to develop cooperation and to find compromises. No final decisions have been made so far because both sets of proposals need to be thoroughly considered.
Speaking of natural gas, there are several options for further cooperation under discussion. They are not mutually exclusive either, so they can all be implemented, although at different periods and with different priorities. One of them involves supplies via the western route. Gazprom is now considering the proposals China has made earlier, and is preparing its own proposals for a compromise. With regard to the eastern route, there is the pipeline option versus LNG deliveries. For us – for Gazprom – the liquefaction project in Vladivostok is certainly a priority. The investment feasibility report is almost ready on that one, but again, this does not mean that no other options will be considered. They are also being discussed.
Following yesterdays consultations, we believe that an agreement could be reached within a few months. I would say there is much more optimism today than ever before.
Our Chinese colleagues have also made several proposals for oil supplies, such as the use of prepayment, as is the case with our other contracts. The board of directors of our joint venture running the Tianjin Refinery is meeting today to determine corporate commercial targets for cooperation. We have handed over a draft intergovernmental agreement for our Chinese colleagues to consider. So, there is obvious progress on the issue and we expect to reach an agreement on the general conditions for implementing joint projects in the next few months.
Question: What does the draft agreement stipulate?
Arkady Dvorkovich: I can’t specify any parametres now, but they are essentially based on the agreements reached during the Russian President’s meeting with Chairman Hu Jintao in Vladivostok during the APEC Leaders’ Meeting.
Question: Excuse me, did you just say a gas agreement will be reached as soon as next month?
Arkady Dvorkovich: We expect so.
Question: I see. What kind of agreement is it? Is it construction or …
Arkady Dvorkovich: It concerns the priority route for gas supplies and cooperation projects on that route.
Question: What about the price?
Arkady Dvorkovich: It will certainly include prices and volumes, and the potential investment cooperation projects.
Question: Is the price still under discussion, or has it already been agreed upon?
Arkady Dvorkovich: There are certain proposals which…
Question: Could you cite any?
Arkady Dvorkovich: No I can’t. But representatives of the companies involved can, if they so wish. We have agreed with our Chinese partners that we leave issues of money out of our political negotiations. We only discuss decisions, while the commercial issues are up to the companies.
Question: But is it still under discussion?
Arkady Dvorkovich: Yes.
Question: There is a lot of discussion about Gazprom’s requirement of a 40% prepayment for the pipeline construction…
Arkady Dvorkovich: Let me repeat: I am not commenting on any figures now. Combining prepayment with an agreed-upon price of supplies is one of the possibilities, given that Gazprom deems this price acceptable. Our Chinese colleagues are considering the proposal.
Question: Have they agreed yet?
Arkady Dvorkovich: I repeat, they have not agreed or disagreed. They have taken Gazprom’s proposal under consideration.
Question: A series of agreements was signed following the Russia-China Energy Dialogue, in particular on coal. Could you comment on this?
Arkady Dvorkovich: It’s a roadmap for our cooperation in the coal sector, which includes a detailed schedule from possible joint geological exploration and coal production to expanding coal transportation by railway. Transport facilities need to be modernised for these projects. There is a study containing several pages of tables with specific cooperation projects.
Question: One of the memorandums involves potential Chinese investment in Russian road construction projects. What projects does this refer to? How large are they? Are there any known details?
Arkady Dvorkovich: No specific projects have been discussed at this stage. One could involve roads. Russia’s state company Avtodor is interested in partnership with Chinese companies in some of its projects as public-private partnership. We have also indicated our potential interest in building high-speed railways on certain sections, although no specific decision has been made yet.
Question: What’s our interest? Will they build? Or will they implement the projects with their own money?
Arkady Dvorkovich: There are two options – commercial cooperation, that is, attracting Chinese partners as financial investors, or technological and construction cooperation. In that case, Chinese partners aren’t the only possibility. There are other counties where this industry is well-developed, so we’ll be looking at all options. But China’s involvement is not ruled out.
