Russia and China sign gas supply deal
SHANGHAI, May 28, 2014 – On May 21, Russia and China signed a long-coming gas supply deal, estimated at $400 billion, during President Vladimir Putin’s visit to Shanghai.
The deal between Gazprom and CNPC, the Russian and Chinese state-owned energy companies, comes at a time when Russia is seeking trading partners in the east due to the tensions between Russia and the West over Ukraine.
Estimates over the pricing range around $350-360 per 1,000 cubic metres, which comes close to the $380-average for Gazprom customers in Europe. Starting from 2018, Russia will deliver up to 38 bcm per year (1.3 tcf).
This is the first time a deal of this magnitude has been signed by Russia since the downfall of the USSR. However, questions of who is going to finance the some $20 billion worth of necessary infrastructure remain on the table.