The issue of paying advance of money to Gasprom on the basis of the contract with the Chinese CNPC has been frozen, said Alexander Medvedev, deputy chairman of Gasprom company. But there is no need in advance payment, Interfax agency quoted Medvedev as saying. Advance payment could have become an instrument for China to ask for reduction of gas price. However, advance payment could be advantageous for the both sides. However, there is nothing critical in application or not application of the advance payment and that is why Gasprom has already started construction of the Siberian Force gas pipeline to deliver gas to China.
In May 2014 Gasprom signed a 30-year-old contract with CNPC to deliver up to 38 billion cub.m. of gas a year from the Chayandin and Kovyktin fields to China via the Siberian Force gas pipeline beginning 2019. The gas pipeline construction started on September 1, 2014 and it is estimated at $25 billion. Gasprom hoped to receive an advance payment from China.
By the end of quarter 1, 2014 Gasprom’s net debt totaled 970 billion rubles ($27.2 billion).
