Russian President Vladimir Putin said that Gazprom and its Chinese partners have decided to pay a 50-50 ratio between rubles and yuan for gas supplies, Sputnik news agency reported on September 7.
On September 7, CNPC website announced that Dai Houliang, chairman of China National Petroleum Corporation (CNPC), held a video conference with Miller, president of Gazprom, during the 7th Eastern Economic Forum, and the two sides exchanged views on extensive cooperation in the natural gas field. During the meeting, the two sides signed supplementary agreements related to the China-Russia East Route Natural Gas Purchase and Sale Agreement. Gazprom said in a statement that the agreement includes a transition to the settlement of gas supplies in the two countries' local currencies, namely rubles and yuan, Sputnik news agency reported Saturday. "The new payment mechanism is a mutually beneficial, timely, reliable and practical solution," Miller said. I believe this will simplify settlement, set an outstanding example for other companies and provide additional impetus to our economic development."
Russia's Sputnik news agency reported on Saturday that the first supply of piped gas to China through the "Power of Siberia" gas pipeline started at the end of 2019 and reached 4.1 billion cubic meters in 2020 and 10.4 billion cubic meters the following year. As the project progresses, it is planned to increase the volume of gas supplied annually to reach the designed annual capacity of 38 billion cubic meters by 2025. In early February 2022, Gazprom signed a second long-term contract with CNPC for exports via the Far East route. The total gas supply will increase to 48 billion cubic meters per year.
Russia Today TV quoted the first deputy Minister of Economic Development Sergei Tolosov as saying that the conversion of Russia's natural gas export settlement to China into local currency is a direct result of Russia's de-dollarization. "In the current conditions, our main task is to diversify the flow of funds and develop a payment system in our own currency."
Wang Xianju, a researcher at the Center for Russian Studies at Renmin University of China and St. Petersburg State University, told the Global Times on Monday that Russia should strengthen the status of the ruble and make more use of it as Western countries have imposed severe financial sanctions on Russia. China is also seeking to gradually internationalize the yuan, so there is a basis for cooperation between the two countries in this area. When asked how China spends its rubles, Wang said that the annual trade volume between China and Russia has not reached the target of 200 billion dollars and will continue to increase, so there is no need to worry about the rubles being a burden.
