Russian President Vladimir Putin signed a multi-billion dollar 30 year gas deal with China on Wednesday, strengthening trade ties between the two nations. The deal was forged between Russian energy giant Gazprom and China National Petroleum Corporation (CNPC).
The deal is expected to provide Russia an alternate trade destination for its energy resources. The deal is expected to take forward Russia's plans to diversify energy trading markets rather than concentrating on Europe alone.
The deal would help Russia tide over European sanctions with respect to the Ukraine political crisis. The agreement was in the waiting for over 10 years and is expected to worth over USD400 billion. Sources in Russia did not disclose the actual value of the deal, but said that it was satisfactory for both sides.
The gas pricing is based on the market price for oil and oil products. In the deal Russia has agreed to supply about 38 million cubic meter of natural gas every year to China for 30 years. The deal was shelved for about 10 years owing to pricing related disagreements between both parties. Turkeministan is currently the leading supplier of gas to China.