Russia state gas firm OAO Gazprom (GAZP.RS) has signed an agreement on the basic terms of gas supplies with China National Petroleum Corporation, but the two sides have yet to agree on a price, a spokesman for Gazprom said Thursday.

The heads of the two companies signed the agreement Thursday for Gazprom to deliver 38 billion cubic meters per year and have agreed on the route, the level of guaranteed volumes CNPC must pay for, and the speed at which supplies will be ramped up, Gazprom said in a statement.

Gazprom has said it wants to finalize a supply deal by the end of the year.

The Russian firm has for years sought to reach a deal to sell gas to China , but talks have been hobbled by disagreements over price and potential routes. Gazprom wants to boost supplies to Asia amid stagnating demand and regulatory pressure in its most lucrative European market.

Gazprom said in its statement that the prices will not be linked to the U.S. benchmark Henry Hub. Gazprom favors contracts linked to the price of oil.

A spokesman for Gazprom, Sergei Kupriyanov, said the sides hadn't yet agreed on the price for supplies. He said, however, that "some progress" had been made in talks, without elaborating.
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