Russia, China switch to national currencies for gas payments

Russia and China have switched to national currencies in their natural gas trade, implementing a deal they signed in early September, a Russian official said Friday.

Noting that Beijing already paid for Russian gas on the basis of the ruble-yuan parity, Deputy Prime Minister Alexander Novak said in a televised interview that payments in national currencies covered gas supplies from Russia and equipment sales from China.

Novak also told broadcaster Rossiya 24 TV that the two countries were also actively switching to payments in their national currencies for oil supplies and petroleum products.

Russian energy giant Gazprom announced a deal on Sept. 6 with state-owned China National Petroleum Corporation (CNPC) to use the national currencies in natural gas payments.

They signed a long-term gas purchase and sale agreement to supply gas from Russia to China through a route in the “Far East,” where Gazprom has started to design and build a gas pipeline.

Gazprom to expand supplies to Asia due to sanctions

Due to restrictions imposed by Western nations on the Russian banking system, Russia is trying to shift away from using dollars and euros as payment in international agreements.

Russian President Vladimir Putin described Western countries imposing sanctions on his country as “unfriendly countries” and said they must pay for gas supplies in rubles.

Gazprom aims to increase its supplies to Asian markets, particularly China, as natural gas exports to Europe have dropped sharply due to the sanctions.

Last year, Gazprom transported 10.4 billion cubic meters of natural gas to China via the Power of Siberia pipeline, which has an annual gas capacity of 38 billion cubic meters.

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