SHANGHAI, May 20 (RIA Novosti) – Russian President Vladimir Putin has suggested nullifying the extraction tax for gas fields delivering fuel to China, while Chinese officials have expressed their readiness to cancel import taxes on gas from Russia, Rosneft CEO Igor Sechin said Tuesday after talks in Shanghai.
“We are talking about fields that will be the source for delivering gas to the Chinese market. This is a very wise and integral suggestion, which could become one of the bases for reaching a compromise. But a compromise is always possible when both sides make concessions,” Sechin said, adding that the Chinese “were ready to cancel the import tax on Russian gas.”
Sechin said he believes a contract on long-term energy supplies will be signed, adding that it is “a strategic direction of cooperation in the energy sector” and “it is important to observe the balance of interests for all the parties.”
“Today President Putin made a very interesting proposal which can be used, referring to nullifying the mineral extraction tax,” Sechin said, adding that the Chinese side could make a counteroffer about Gazprom’s participation in China’s pipeline network.
According to Sechin, the Russian-Chinese gas contract is “long overdue.”
“The fact that the president is personally engaged in this issue today says that we are close to the final agreement and I wish success to Gazprom and CNPC,” he said.
In March 2013, Russian energy giant Gazprom and the China National Petroleum Corporation (CNPC) signed a memorandum of understanding on the planned gas supplies to China along the so-called eastern route via the Power of Siberia pipeline.
Gazprom CEO Alexei Miller said the company could receive advance payment from China for the gas, which could start flowing as early as 2018. The planned project has an estimated capacity to pump up to 38 billion cubic meters annually, which could later increase to 60 billion cubic meters.