Russia offering zero gas tax for fields that supply gas to China

Russian President Vladimir Putin has offered to zero out the mineral extraction tax for gas fields that supply gas to China under a future contract.

Russian President Vladimir Putin has offered to zero out the mineral extraction tax for gas fields that supply gas to China under a future contract.

China, for its part, has said it is ready to scrap import duty on Russian gas, Igor Sechin, the head of state oil giant Rosneft, told reporters.

"We're talking about fields that will be sources of gas for the Chinese market. This is a very reasonable and integral proposal, which could serve as the basis for a compromise. But compromise is always possible when both sides accommodate each other," Sechin said.

"They are ready to scrap import duties on Russian gas. And that is also a step towards," he said.

"I'm hoping a contract will be signed," Sechin said. "This is a strategic area of energy cooperation and of course it is important to uphold a balance of interests for all parties," he said.

"President Putin made a very interesting proposal today, one which we can take advantage of, regarding the possible zeroing of mineral extraction tax. I think this will be contingent on a timeframe. I think the Chinese side might come up with a proposal of their own regarding Gazprom's participation in Chinese distribution networks with possible access to the consumer," he said.

Sechin said a gas contract with China was "long overdue."

"The fact that the country's president has addressed this in person today suggests we are close to a final agreement and I wish Gazprom and CNPC success," Sechin said.

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