Gas deal to bring benefits, price pressure for China

The gas price stands at 2.28 yuan per cubic meter for residential use in Beijing and 3.23 yuan per cubic meter for industrial and commercial use.

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Dong Xiucheng, director of China Oil & Gas Center, said the gas imports from Russia will accelerate price reform in China, and that raising the gas price might be inevitable in the long run.

"The bottom line is to guarantee that gas imports won't incur loss," Dong said, "because in the long run, the price hiking pressure will come from a new pricing scheme for both existing and newly imported gas."

He said China desperately needs to improve its energy structure by cutting coal consumption and turning to cleaner energy, as the government vowed to raise the use of non-fossil energy to 15 percent in the country's whole energy consumption by 2020.

The natural gas must also account for 15 percent of China's entire energy consumption by 2020, from 5.9 percent now.

Lyu Ying, a gas analyst working for chemical industrial website oilgas.com, said the Sino-Russian gas cooperation creates a win-win situation for both countries

The agreement enables Russia to expand the market for its gas, which now goes mostly to Europe, while gas-thirsty China can also make up a great part of its gas consumption through its cooperation with Russia.

But Lyu also expressed caution that China must not rely too much on Russia for gas imports, but needs to diversify its energy imports.

"In the future, China needs to look for more gas supply sources to avoid economic and political restraints arising from over-reliance on a single country," she added.