Gazprom Rises to Two-Week High in Moscow on China Gas Plan
OAO Gazprom (GAZP) rose to a two-week high in Moscow trading as the largest natural gas producer said it plans to sign a supply contract with China by the end of the year after almost a decade of talks.
Gazprom rose as much as 1.5 percent to 138.52 rubles, the highest since Feb. 8, and was at 137.60 rubles as of 6:50 p.m. local time.
The state-run gas exporter agreed to speed up talks with China National Petroleum Corp. on supplies from Russia’s eastern gas fields to China, according to a statement today.
Gazprom has been negotiating a deal to transport as much as 68 billion cubic meters of gas a year to China, the world’s fastest growing major economy, since the two companies signed a cooperation deal in 2004. The talks repeatedly stalled because of disagreements on prices.
“Any impulse on the China deal will be assessed as positive,” Artem Kvas, an oil and gas analyst at Renaissance Capital, which has a buy recommendation for the stock, said by phone. The current market valuations of Gazprom assume the worst case scenario with “strengthening European competition and pressure on the domestic market,” he said.
The eastern pipeline, which will supply the industrially- developed eastern territories of China, will support Gazprom’s plans to develop eastern Siberia and the Far East, Kvas said.
Gazprom plans to build a 3,200-kilometer (2,000 mile) pipeline from fields in eastern Siberia to the port of Vladivostok, with the capacity of 61 billion cubic meters a year. It also plans a gas liquefaction plant at Vladivostok and may also cooperate with CNPC on that project, Gazprom said today.
To contact the editor responsible for this story: Will Kennedy at email@example.com