Analysts: Beijing can purchase Russian gas cheaper and Gazprom will cover the shortfall in income due to Russian citizens

The management of Gazprom announced, it was going to take monetary advance from China on account of the future deliveries. Meanwhile, analysts apprehend that Beijing can buy Russian gas at the amount lower than its prime cost and Gazprom will cover the shortfall in income due to Russian citizens, i.e. due to obtaining of tax preferences and increment of domestic gas tariffs.

At the same time, the amount of the supposed advance is not specified. Besides, it remains unclear what pricing formula will be used by the RF and China. The negotiations of the delivery price are being conducted for almost 10 years, however, no result has been obtained. In March 2010 the Head of the PRC State Energy Department Tzan Gobao claimed, “the longstanding negotiations about the price that PRC is ready to pay for Russian gas are almost completed”.