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Russia reached a $400 billion deal

May 22, 2014

Russia reached a $400 billion deal to supply natural gas to China through a new pipeline over 30 years, a milestone in relations between the world’s largest energy producer and the biggest consumer. President Vladimir Putin is turning to China to bolster Russia’s economy as relations sour with the U.S. and European Union because of the crisis in Ukraine.

Yesterday’s accord, signed after more than a decade of talks, will allow state-run gas producer Gazprom to invest $55 billion developing giant gas fields in eastern Siberia and building the pipeline, Putin said. It’s an “epochal event,” Putin said in Shanghai after the contract was signed. Both countries are satisfied with the price, he said. Gazprom Chief Executive Officer Alexey Miller signed the deal with Zhou Jiping, chairman of China National Petroleum Corp. The agreement is for 38 billion cubic meters of gas annually over 30 years, Miller said. While he declined to give a price, he said the total value would be about $400 billion.

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