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China, Russia ink US$400 billion gas deal

SHANGHAI--China signed a landmark deal Wednesday to buy Russian natural gas worth about US$400 billion, giving a boost to diplomatically isolated President Vladimir Putin and expanding Moscow's ties with Asia.

Price negotiations on the 30-year deal continued into the final hours of a two-day visit by Putin to China, during which both sides had said they hoped to sign an agreement. Putin was in Shanghai for an Asian security conference.

The deal gives Moscow an economic boost at a time when Washington and the European Union have imposed visa bans and asset freezes on dozens of Russian officials and several companies over Ukraine. It allows Russia to diversify its markets for gas, which now goes mostly to Europe.

The agreement “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 has provided “a 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.”

Russia's economy has been bruised by its dispute with the West over Ukraine's tilt toward the European Union, a shift that inflamed Moscow's insecurities about declining influence and sparked its annexation of Crimea in March.

The supplies will help to ease gas shortages in China, the world's second-largest economy, and curb reliance on coal.

The agreement calls for Russian government-controlled Gazprom to supply state-owned China National Petroleum Corp. with 38 billion cubic meters of gas annually, Gazprom spokesman Sergey Kupriyanov told The Associated Press. That would represent about a quarter of China's current annual gas consumption of nearly 150 billion cubic meters.

1 Comment
May 23, 2014     dgodzilla@
Are investors trying to increase the price of oil by switching to oil soles on new shoes That wear out fast forcing repeat trips back and forth to stores numerous times a year wasting gasoline so they can make more shoe sales each year and possibly leaving hollow spots for stones to catch into causing feet damage from fast deterioration of the soles and more back and forth visits to the doctor for feet repair and wasting more gasoline and time and money? More trash to get rid of degrading the environment?
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