China and Russia sign natural gas deal worth $400B

Vladimir Putin
Russian President Vladimir Putin

China and Russia signed a major 30-year natural gas deal on Wednesday that would send gas from Siberia by pipeline to China.

There are other projects developing between China and Russia in the fields of aviation.  Combining Russian design with the production capacities of China could lead to superiority over U.S. technological. With these deals in the works it is not surprising that Russia responded to U.S. sanctions by cutting off exports of the rocket engines the U.S. used to launch military satellites.

The central themes of the talks between the two leaders will be two projects in the field of aviation – the creation of a joint wide-body long-haul aircraft and the production of Mi-26 heavy helicopter in China, the Kommersant reports.

Russia, entering into such cooperation with China, indicates that it is ready to open access to Russian aircraft technologies, despite the fact that China previously resorted to building unlicensed copies of well-known Russian aircraft. pravda

Russia will invest $55 billion in fulfilling the oil contract while China will invest $22 billion, Putin told Russian reporters in Shanghai. He said the gas price would be based on a formula linked to that of oil and oil products.

Plans call for building a pipeline to link China’s northeast to a line that carries gas from western Siberia to the Pacific port of Vladivostok. The development of a gas center on the Pacific will allow Russia to export to prosperous markets in Japan and South Korea.

Russian President Putin said the deal is the largest ever for Russian natural gas industry.  This deal shifts the economic relations between Russia and China with the opening of a new major export market to the east for Russia.  The deal diversifies Russia’s market for gas, which now goes mostly to Europe.  Russia’s gas sales to China also demonstrate Russia is not completely isolated because of the Ukraine crisis, nor dependent on the West.

Online:  CBC: Russia, China sign natural gas deal worth $400B

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