Russia has signed U.S. $ 117.5 billion gas deal with China over fears of losing European customers
The President of Russia – Vladimir Putin and the President of China – Xi Jinping have agreed to a new oil and gas deal worth U.S. $ 117.5 billion, as Russia attempts to ramp up it’s Far East exports at a time of increasing tensions with European customers over Ukraine.
Putin is presently in China for Winter Olympics. The two leaders also discussed several other issues, including Russia’s rising tension with European Union (E.U.), United States (U.S.) and North Atlantic Treaty Organisations (NATO).
As per the new deal, Russia will supply 10 Billion Cubic Metres (BCM) of gas per year to China for the next 25 years from Russia’s Far East. Russia is China’s third largest gas supplier. China is the world’s largest energy consumer. By strengthening ties with China over gas, Russia will reduce dependence on its traditional European energy customers.
Taking it to twitter, the twitter handle of President of Russia tweeted,
Meeting with President of China Xi Jinping: trade and economic cooperation, countering COVID-19, opening of the #Beijing2022 Olympics https://t.co/DjlhUsaUOk pic.twitter.com/9yem7RmRUw
— President of Russia (@KremlinRussia_E) February 4, 2022
Speaking on the occasion Putin said “Our oilmen have prepared very good new solutions on hydrocarbon supplies to the People’s Republic of China. And a step forward was made in the gas industry.”
Russia already sends gas to China via its Power of Siberia pipeline, which began pumping supplies in 2019, and by shipping liquefied natural gas (LNG). Russia has exported 16.5 BCM of gas to China in 2021. This gas was supplied to China under a separate agreement where Russia had agreed to supply 38 BCM of gas to China by 2025. The Power of Siberia network is not connected to pipelines that send gas to Europe, which has faced surging gas prices due to tight supplies, one of several points of tension with Moscow.
Separately, Russian oil giant – Rosneft has also signed a U.S. $ 80 billion deal with China’s China National Petroleum Corporation (CNPC) to supply 100 million tonnes of oil through Kazakhstan over 10 years, effectively extending an existing deal.
During the meeting, Putin accused the United States (U.S.) of stoking tensions over Ukraine, which has angered Moscow by wanting to join NATO. Russia is Europe’s biggest provider of natural gas, and Western countries are worried that already strained supplies could be interrupted in the event of a conflict.
A Memorandum of Understanding (MoU) on a cooperation in low-carbon development between the was also signed. They also agreed to work on a road map for high-quality development of trade in goods and services.
Jinping said China wants to increase bilateral trade to U.S. $ 250 billion. Putin spoke about promoting the use of national currencies in mutual settlements, which the Chinese side supported. They also discussed bilateral military-technical cooperation, mutual recognition of Coronavirus (COVID-19) vaccines and the opening of borders depending on the epidemiological situation.
