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Gas deal signed

Shanghai, May 21 (Reuters): China and Russia signed a $400-billion gas supply deal today, securing the world’s top energy user a major source of cleaner fuel and opening up a new market for Moscow as it risks losing European customers over the Ukraine crisis.

The long-awaited agreement is a political triumph for Russian President Vladimir Putin, who is courting partners in Asia as those in Europe and the US seek to isolate him over Moscow’s annexation of the Crimean peninsula.

Commercially, much depends on the price and other terms of the contract, which has been more than a decade in the making. China had the upper hand as negotiations entered their final phase, aware of Putin’s face-off with the West.

“This is the biggest contract in the history of the gas sector of the former USSR,” said Putin, after the agreement was signed in Shanghai between state-controlled entities Gazprom and China National Petroleum Corp (CNPC).

“Our Chinese friends are difficult, hard negotiators,” he said, noting that talks went on until 4am.

Putin and Chinese counterpart Xi Jinping applauded as they witnessed the deal being signed, just hours before the Russian leader was due to leave Shanghai at the end of a two-day visit. The gas deal came in time for a major economic summit in the northern Russian city of St Petersburg starting tomorrow.

 
 
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