Rosneft says agreed with Beijing Gas to set up venture to develop CNG stations in Russia

Russia's Rosneft and China's Beijing Gas energy companies have signed an agreement on establishing a joint venture to develop a network of compressed natural gas (CNG) filling stations in Russia, the Russian energy giant said on Thursday.

Back in September, the two companies agreed on the main conditions for creating the joint venture during the Eastern Economic Forum (EEF) in the Russian city of Vladivostok.

"An agreement to set up a joint venture for construction and operation of a network of CNG stations in Russia on the basis of Vankor UTT was signed by Rosneft and Beijing Gas Group Company Limited (hereinafter, Beijing Gas) during the first Russian-Chinese Energy Business Forum. Under the agreement, Beijing Gas will have a 45% stake," Rosneft said in a statement.

Under the agreement, the sides plan to build about 170 CNG stations in Russia and explore the possible use of liquefied natural gas (LNG) as a motor fuel.

The statement added that the agreement would enable the two companies to expand strategic cooperation in the use of natural gas as an environmentally friendly fuel.

Beijing Gas Group Company Limited is part of the Beijing Enterprises Group Limited, which is one of the leading companies in the natural gas sector, gas infrastructure and energy production in the Beijing region.

In June 2017, Rosneft and Beijing Gas closed the sale of a 20 percent stake in Rosneft subsidiary Verkhnechonskneftegaz to the Chinese company for $1.1 billion.