Russia, China agree to use national currencies in gas payments

Russian energy giant Gazprom announced a deal on Tuesday with state-owned China National Petroleum Corporation (CNPC) to use both yuan and ruble in natural gas payments.

In a meeting via videoconference between Gazprom President Aleksey Miller and CNPC President Dai Houliang, the parties signed a long-term gas purchase and sale agreement in the national currencies of the countries - rubles and yuan.

"The new payment mechanism is a mutually beneficial, timely, reliable and practical solution. I believe it will speed up business transactions, set an excellent example for other companies and give additional impetus to the development of our economies," Miller said.

The two companies agreed 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.

In addition, the parties discussed linking the Russian and gas transmission systems through the Power of Siberia-2 gas pipeline in Russia and the Soyuz Vostok gas pipeline in Mongolia.

- Gazprom wants 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 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.