It is reported that China is unwilling to pay the considerably higher natural gas prices that Gazprom is asking, potentially delaying a project to build two pipelines between the countries.

Mr Alexei Mastepanov an adviser to the company's deputy chairman said that the project is being held back because China National Petroleum, the nation's biggest company and Gazprom could not agree on the price. Both sides have agreed on the volume and destinations for the fuel.

He said that "When the Chinese considerably needs gas that is when the agreement will be reached. Both sides have agreed in principle to supply 68 billion cubic meters of gas per year to China through the two pipelines, declining to say how much Gazprom was asking for the fuel.”

Mr Vladimir Sayenko deputy head of the fuel and energy department at the Industry and Energy Ministry said at Chinese Russian Kazakh oil and gas forum in Beijing that China does not need Russian gas until 2012, so there's no urgency to complete talks. He said the cost of the first phase of construction of a crude oil pipeline from Russia to China has risen to USD 12 billion because of rising raw material costs and the depreciation of the dollar. The original budget was USD 6.6 billion to USD 6.7 billion.

Mr Xia Yishan an adviser to the China on Russian Chinese pipeline projects said that Russia is asking higher prices from oil and gas exports to China as international benchmarks rise.