Russia secures China gas deal at last minute
A last minute agreement over a huge gas deal has spared the blushes of Russian president Vladimir Putin and allows him to return home with a 30-year agreement with China. On Wednesday, PetroChina, the country’s state-owned subsidiary of China National Petroleum Corp, announced that it had agreed the deal with Russia that is thought to be worth well over $400bn. The firm did not reveal the exact price details, however.
Russia has been talking up its potential deal with China as a sign that it doesn’t need Europe’s money for its gas, but a sudden delay to its signing threatened to cause embarrassment to Putin.
Whilst he tours China on his first state visit to the country, Putin has been consistently saying that the deal will be signed, therefore offering Russia an alternative source of income for its gas after the recent troubles with Ukraine and western leaders. At the beginning of the week, Russia’s deputy energy minister, Anatoly Yanovsky, had described the negotiations as being “98 percent ready”.
However, what have been fraught and strenuous negotiations between PetroChina, and Russia’s Gazprom looked like they might have failed to be completed by the time Putin departed today. Speaking to the Financial Times earlier this morning, PetroChina spokesman Mao Zefeng said that price issues over the 30-year, $456bn had yet to be ironed out. “We won’t be signing. At the moment the import price and the domestic price are inverted. We are already losing money on imported gas, and we can’t lose more.”
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