Russian firm Gazprom has signed a memorandum of understanding (MoU) with state-owned oil and gas company China National Petroleum Corporation (CNPC) in the field of underground gas storage and gas-fired power generation in China.

Under the terms of the MoU, the two firms aim to explore the prospects for cooperation in building underground gas storage (UGS) and gas-fired power generation facilities in China.

Gazprom Management Committee chairman Alexey Miller said: "The Russian-Chinese dialogue in the gas sector is crossing into new territory.

Our cooperation in the field of underground gas storage and power generation will help deepen the relationship between the companies and considerably improve the environmental situation in China."

The team will analyze and assess the geological, technological, and economic conditions for creating UGS facilities in Heilongjiang, Jiangsu, and Zhejiang.

Additionally, a joint venture will be launched to focus on implementation of UGS-related projects.

Upon examining by late August, the parties will select target projects in the field of gas-fired heat and power generation.

The firms will then make an investment decision for the selected projects, which will be offered by CNPC, and choose an organizational and legal framework for implementation.

In 2015, Gazprom signed MoU with CNPC for the project of pipeline gas supplies to China from the Russian Far East.

Gazprom has considerable experience in building and operating underground gas storage facilities both in Russia and abroad.