China Signs Gas Deal With Turkmenistan Amid Russian Talks

China signed an agreement to increase natural-gas supplies from Turkmenistan even as it continues negotiations with Russia’s OAO Gazprom, the world’s biggest producer, to buy the fuel.

President Hu Jintao signed the deal with his visiting counterpart Gurbanguly Berdymukhammedov, China’s foreign ministry spokesman Liu Weimin said at a briefing in Beijing. Supplies will increase by 25 billion cubic meters a year, bringing the annual volume to 65 billion “in the near future,” state-run China Daily said, citing the Turkmen president.

Liu Weijiang, Beijing-based director of the international department of China National Petroleum Corp., declined to comment on the agreement when reached by telephone. CNPC is the nation’s biggest oil company and the nation’s importer of Turkmen gas.

China, the world’s biggest energy user, has relied on gas supplied via pipeline from Turkmenistan the past two years and wants to ramp up imports by securing Russian deliveries. It has been in talks with Russia for a decade to construct pipelines and the two sides have delayed signing a pact as they wrangle over how much China will pay for the fuel.

Turkmenistan may sell China an additional 20 billion cubic meters a year of gas, or a 50 percent increase from the 40 billion it plans to supply by 2015, the country’s First Deputy Prime Minister Baymurat Hojamuhamedov said in March.

Chinese imports from Turkmenistan were 12.3 billion cubic meters in the first 10 months of this year, according to data published on Nov. 16 by the National Development and Reform Commission, the Asian nation’s top economic planner.

Turkmenistan has sent more than 18 billion cubic meters of gas to China so far, CNPC said on its website today. The Central Asian country started deliveries in December 2009.

To contact Bloomberg News staff for this story: Chua Baizhen in Beijing at bchua14@bloomberg.net

To contact the editor responsible for this story: Paul Gordon at pgordon6@bloomberg.net

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