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Why is gas agreement such a big deal?

Wednesday, May 21, 2014 - 01:14

May 21 - China has signed a $400 billion natural gas supply deal with Russia, giving them a new source of clean fuel and Moscow a new market at a key time. Joanna Partridge reports.

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It's been in the pipeline for more than a decade. But a deal just signed between Russia and China over natural gas supplies now has wider significance. As well as giving the world's top user a new source of clean energy it's also opened up a market to Moscow. With Europeans looking elsewhere thanks to the Ukraine crisis that's almost as big a deal as the agreement itself. President Putin was certainly talking up his relationship with China ahead of the signing. (SOUNDBITE) (Russian) RUSSIAN PRESIDENT, VLADIMIR PUTIN, SAYING: "Russia and China have established an investment cooperation committee that will continue to push forward our cooperation in investments as well as promote major business incentives in the energy sector." The deal will see Russia supply 38 billion cubic metres of gas to China every year for 30 years. The overall contract is worth more than $400 billion. The gas will be transported along a new pipeline linking Siberian gas fields to China's main centres. Russia's Gazprom won't say at what price it's sold the gas - that's been the sticking point in the past. But the fact that Europe is keen to wean itself of Russian energy must have strengthened China's hand. And for Putin forming new partnerships in Asia is a major triumph.

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Why is gas agreement such a big deal?

Wednesday, May 21, 2014 - 01:14