Russia, China sign groundbreaking gas deal

Wednesday, May 21, 2014

Russia's Gazprom and China National Petroleum Corp (CNPC) signed a $400 billion gas supply deal

Russia's Gazprom and China National Petroleum Corp (CNPC) signed a $400 billion gas supply deal

SHANGHAI - Russia signed a 30-year natural gas agreement with China, said a Gazprom official on Wednesday.

Russia's Gazprom and China National Petroleum Corp. signed a $400 billion gas supply deal, said Gazprom spokesperson Sergei Kupriyanov.

Nearly 38 billion cubic meters of natural gas are expected to be exported to China annually. However, the pricing remained undisclosed. 

The deal comes after ten years of negotiations, said Putin’s spokesperson, Dmitry Peskov, to Russian RIA Novosti news agency Tuesday.

Russia, under the threat of sanctions from Europe and the United States due to the crisis in Ukraine, has been seeking new energy markets in Asia.

Although the EU is currently looking to reduce its reliance on Russian gas, it still remains Russia's largest energy market, buying more than 160 billion cubic meters of Russian natural gas in 2013. Still, the EU stance has prompted Moscow to diversify gas deliveries and boost its presence in Asian markets.

As for China, it plans to reduce its dependence on coal with this deal. The world's largest economy consumed about 170 billion cubic meters of natural gas in 2013 and is expected to consume 420 billion cubic meters per year by 2020.

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