Economy and Finance
Putin Moves Away From Europe As Huge Gas Deal With China Is Signed
It will be interesting to see if Europe modifies its stance over the Ukraine in light of the new deal.
Russia and China have finally reached a deal on Russia supplying gas to China.
The deal between Russia’s Gazprom and China National Petroleum Corp (CNPC) has been years in the making. No official price has been given, but it estimated to be worth over $400 billion.
The deal which will last for 30 years, will relieve pressure on Moscow regarding the financial sanctions imposed by the USA and NATO countries, imposed after Russia entered the Crimea area of Ukraine.
Russia’s economy is heavily reliant on energy exports, exports that predominantly went to Ukraine and Europe. Russia needed to find other trading partners as tensions with Europe and Ukraine continue to rise. Russia is moving towards closer ties with Asia, both economic and military.
The 38 million cubic meters of gas Russia have agreed to supply is far less than the 160 million cubic meters supplied to Europe each year. What the deal shows though, is that Russia is diversifying, and with China estimated to be consuming 420 million cubic meters of gas per annum by 2020, there is scope for Russia to divert gas from Europe to China.
It will be interesting to see if Europe modifies its stance over the Ukraine in light of the new deal.
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