Chinese oil company CNPC and Gazprom have agreed a gas pricing deal that should unlock a major pipeline plan, but it may come at a higher cost than Beijing wanted.

Alexander Medvedev, Gazprom’s deputy chairman, said the two sides had reached consensus on the pricing mechanism for fuel piped from Russia to China after months of wrangling that had held up the start of work. However he added that negotiations “would not be influenced by China’s low natural gas import prices”.

Beijing holds state-set gas prices below international market levels, while Gazprom had demanded the gas export price for China should be at least comparable with supplies to Europe, after taking transportation costs into account.

Under a deal signed last year, two pipelines either side of Mongolia could deliver up to 80 billion cubic meters of gas per year — almost double the amount the company sells to Germany, its top customer in Europe. Moscow has agreed in principle to begin pumping gas to China through the west link in 2011 and by the east link in 2016, the country’s top energy official said this summer. The first pipeline would be fed with output from western Siberian fields, Gazprom said last year. Gas for a second pipeline could come from Sakhalin and maybe the Kovykta field in East Siberia.