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May 21, 2014 5:56 am
China to delay Russia gas deal in blow to Putin

China will not reach an agreement to import natural gas from Russia’s Gazprom during a state visit by President Vladimir Putin this week despite strenuous Russian efforts to secure what has been portrayed as a key test of closer Sino-Russian ties.
As Moscow’s relations with the West have deteriorated over the crisis in Ukraine, Mr Putin has sought to show the world and the Russian people that he has alternative friends to the east.
Russian media, officials and Mr Putin himself have repeatedly said that the gas deal, which has been under negotiation for more than a decade, would be signed during the Russian President’s visit to Shanghai, which ends on Wednesday evening.
But a spokesman for PetroChina, the listed subsidiary of state-owned China National Petroleum Corp, China’s largest oil company, told the Financial Times on Wednesday that the deal would not be signed in the near future.
“We won’t be signing,” said Mao Zefeng, spokesman for the company, which Russian media and officials had said was to sign a 30-year, $456bn deal to buy Russian gas from Gazprom during Mr Putin’s visit.
“At the moment the import price and the domestic price are inverted. We are already losing money on imported gas, and we can’t lose more,”
Earlier this week Russia’s deputy energy minister Anatoly Yanovsky was quoted by Russian state-controlled media saying the deal was “98 per cent ready”.
In the wake of Russia’s aggressive actions in Ukraine, European countries have been rethinking their dependence on Russian gas.
If the centrepiece deal had gone ahead it would have been a powerful sign of Russia’s ability to reduce its reliance on Europe, the largest importer of Russian energy.