China, Russia ink mammoth $400 bn gas deal
May 21, 2014, 10:40 am

Russia’s state-owned Gazprom will now supply China National Petroleum Corp (CNPC) with 38 billion cubic meters (bcm) of natural gas a year for 30 years [AP]

Despite many Western media reports that said the two sides had failed to resolve differences, the historic gas deal came on the second day of Russian President Vladimir Putin’s visit to China.

Putin had said on Tuesday that “significant progress” had been made over the price in the lengthy talks.

Russia’s state-owned Gazprom will now supply China National Petroleum Corp (CNPC) with 38 billion cubic meters (bcm) of natural gas a year for 30 years.

Russia has been attempting to shrug off its dependence on European energy markets and instead adopt a “look-east” policy towards China and India.

Chinese President Xi Jinping and Russian President Vladimir Putin on Wednesday presided over the signing ceremony of “two documents, China and Russia Purchase and Sales Contract on East Route Gas Project and a memorandum”, Chinese state run Xinhua said.

Zhou Jiping, Chairman of China National Petroleum Corporation and Wu Xinxiong, head of China’s National Energy Administration and also deputy head of the National Development and Reform Commission, China’s top economic watchdog, signed the deal with Russian officials.

The deal would ensure the needs of energy hungry China, that is trying to switch to cleaner fuel by moving away from coal, are taken care of for the next 30 years.

A joint statement issued after Putin and Xi held talks on Tuesday, said the two countries will “establish a comprehensive energy cooperation partnership.”

Wednesday’s agreement on the gas supply deal would come as a massive boost to Sino-Russian ties even as Russia struggles with EU and US sanctions over Ukraine.

Earlier on Tuesday, Russian bank, VTB, signed a currency swap deal with Bank of China to bypass the US dollar.

TBP and Agencies