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Turning East
China Ready to Sign 2nd Major Gas Deal with Russia

We’ve already heard how eager Moscow is to sign a second gas deal with Beijing, but now it’s a Chinese minister’s turn to publicly tout the warming relationship and express a desire for a finalized deal in the near future. The Financial Times reports:

The relationship between the two on-again, off-again Cold War allies is “mature and stable,” Chinese foreign minister Wang Yi told a press conference on Sunday. “There is enormous internal impetus and room for expansion.”

Much of that expansion will be in oil, gas and nuclear energy co-operation, he added. “We will fully begin construction of the eastern gas line and sign a co-operation agreement for the western line,” he said. […]

Beijing expects the deal to be finalised later this year, leading to a pipeline that will, for the first time, allow Russia to choose between exporting gas to Asia or to Europe.

The two countries signed a massive $400 billion gas deal last year, which would send supplies from Russia’s far east south to China, but have also been in talks for this second deal, which would ship gas through a pipeline farther to the west. Last month Russia’s energy minister hoped that the second deal would be finalized sometime this spring, and now we’re hearing China’s foreign minister hope that it will be closed by the end of the year.

This is big, not just because of the quantities of money and gas involved, but also because it signals a strategic shift for Russia. Moscow has long enjoyed using its energy exports as leverage in Europe, but recent events in Ukraine have prompted many European policymakers to start securing alternatives. That’s a problem for Russia, whose budget relies heavily on the revenues generated from oil and gas sales. So, checked in the West, Moscow is finding a new customer in the east.

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  • rheddles

    Everybody is trying to get away from insecure energy sources ASAP. This will only make things dicier in the ME as they run low on petrodollars.

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