Chinese sign 30-year deal for Russian natural gas

China signed a landmark $400 billion deal Wednesday to buy natural gas from Russia, binding Moscow more closely to Beijing at a time when President Vladimir Putin’s relations with the West have deteriorated.
By LOUISE WATT and VLADIMIR ISACHENKOV, Associated Press Published: May 21, 2014
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— China signed a landmark $400 billion deal Wednesday to buy natural gas from Russia, binding Moscow more closely to Beijing at a time when President Vladimir Putin’s relations with the West have deteriorated to the lowest point ever.

China’s president also called for an Asian security arrangement that would include Russia and Iran and exclude the United States.

The 30-year gas deal, worked out during a two-day visit by Putin to China, gives Moscow an economic boost at a time when Washington and the European Union have imposed sanctions against Russia and Europe has threatened to cut its gas imports to punish the Kremlin over the crisis in Ukraine.

The agreement enables Russia to expand the market for its gas, which now goes mostly to Europe.

Strategic partnership

It “opened the door for Russia to enter into Asia’s gas market,” said Keun-Wook Paik, senior research fellow at the Oxford Institute for Energy Studies.

Politically, the deal provides “breathing space for Russia,” Paik said. “Russia, and Putin, can demonstrate it’s not completely isolated because of the Ukraine crisis. Russia has demonstrated that they have a very reliable strategic partnership with China.”

For China, the world’s second-largest economy, the deal will help ease gas shortages and curb its reliance on coal.

U.S. Secretary of State John Kerry noted that Russia and China have been trying to work out an energy agreement for 10 years and said the deal “isn’t a sudden response to what’s been going on” in Ukraine.

“And if the world benefits as a result of that, that’s fine,” he said.

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