China and Russia sign historic $400bn gas deal after 10 years of negotiations

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Vladimir Putin, left, the Gazprom management committee chairman, Alexei Miller, centre, and the China National Petroleum Corporation chairman, Zhou Jiping. Photograph: ITAR-TASS / Barcroft Media
After 10 years of negotiations, Russia\’s Gazprom and China\’s CNPC have finally signed a historic gas deal which will provide the world\’s fastest growing economy with the natural gas it needs to keep pace for the next 30 years.
The deal between Russia\’s Gazprom and China National Petroleum Corp (CNPC) has been 10 years in the making.
Russia has been keen to find an alternative energy market for its gas as it faces the possibility of European sanctions over the crisis in Ukraine.
The gas will be transported along a new pipeline linking Siberian gas fields to China\’s main consumption centres near its coastline.
Russian President Vladimir Putin and his Chinese counterpart Xi Jinping witnessed the deal in Shanghai between Russian state-controlled company Gazprom and China National Petroleum Corp (CNPC).
Gazprom declined to disclose what price was agreed, a key hurdle in talks that have dragged on for more than a decade, the Reuters news agency reported on Wednesday.
Symbolically, for Putin the agreement represents a major triumph as he seeks to forge new partnerships in Asia while customers in Europe attempt to reduce their reliance on Russian gas in the wake of the crisis in Ukraine.
But from a commercial point of view, much will depend on the price and other terms of the deal.
Shares in Gazprom rose almost two percent in reaction to the announcement of the deal.
China is Russia\’s largest single trading partner, with bilateral trade flows of $90bn in 2013.
The two neighbours aim to double the volume to $200bn in 10 years.
Source: Reuters and agencies

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