After a decade of hard nosed negotiations, Russia’s Gazprom and China’s CNPC have signed a $400 Billion gas deal which will provide the world’s fastest growing economy with high quality natural gas for the next 30 years.
The total value of the contract is $400 billion, Gazprom CEO Aleksey Miller said. However, the price of gas stipulated in the document remains a “commercial secret.”
Russia will supply China 38 billion cubic meters of gas per year via the eastern ‘Power of Siberia’ pipeline, which crosses Siberia and reaches China’s populous northeast regions. A separate route that could deliver gas to China’s western provinces and provide diversification is also in the works, according to Putin.
A memorandum of understanding was signed in the presence of Russian President Vladimir Putin and President of China Xi Jinping on the second day of Putin’s two-day state visit to Shanghai.
Russia’s president Vladimir Putin reasserts the Russia-China bilateral decision to settle “mutual payments in national currencies,” i.e. bypassing the US Dollar.
He also reiterated that financial policy being implemented between the two countries to optimize the “cooperation between [Russia and China] banks.
Other surprises are in store as Putin stressed. “We intend to consider new financial instruments…”
In terms of trade it appears that China and Russia have established mechanisms which undermine the economic sanctions regime implemented against the two countries: