President Vladimir Putin arrived in Beijing on May 19 to hold talks with President Xi Jinping during his first foreign visit this year.
The visit takes place in the context of the Iranian conflict creating opportunities for Russia to further deepen energy relations with China.
Russia hopes that developments in the energy market will make China more flexible in negotiations on gas price contracts for the Power of Siberia 2 gas pipeline, many sources familiar with the matter said.
Chinese officials expressed interest in accelerating negotiations, although there has been no concrete progress so far, a Russian official revealed.
The gas pipeline project "is on the agenda, and we are committed to discussing it seriously. I believe that this topic will be discussed in great detail between the leaders" - Kremlin foreign policy advisor Yuri Ushakov shared with the press on May 18.
However, the progress of reaching any agreement depends on President Xi Jinping and so far there has been no sign that Russia can easily reach an agreement.
President Vladimir Putin and President Xi Jinping are scheduled to hold talks on May 20 and will attend a tea party together in the evening to continue discussions, Ushakov revealed.
The Russian delegation accompanying the president to visit China includes 5 deputy ministers, 8 ministers and Governor of the Central Bank Elvira Nabiullina as well as heads of state-owned corporations and large enterprises.
The Middle East conflict "strengthens Russia-China relations by strengthening Russia's role as an important raw material supplier to China" - Vasily Kashin, a China expert at the Moscow School of Advanced Economics, said. According to him, President Putin's visit reflects this new geopolitical reality as well as China's increasing interest in energy and logistics cooperation with Russia.
Gazprom has made a very competitive offer on gas prices for the Power of Siberia 2 gas pipeline, expected to connect from Siberia to China via Mongolia, although Chinese partners are not willing to promote the project, according to a source close to the Russian state-owned energy corporation. The goal is still to reach an agreement on gas prices in September, the source said.
In March, China announced its goal of achieving progress on the gas pipeline with Russia in the next 5-year plan. At the end of April, Gazprom CEO Alexey Miller and Chairman of China National Oil Corporation Dai Houliang met in Beijing and discussed "the development of a strategic partnership".
On May 9, President Vladimir Putin said that "almost all key issues" on gas and oil cooperation have been agreed upon with China. "If we can complete them and bring the process to the final point during the visit, I will be very pleased" - he said.
