Russia Nears Completion Of Second "Holy Grail" Gas Deal With China

Tyler Durden's picture

Six months ago, something few had expected would take place in 2014, or even in the coming years, happened: under Western pressure and out of a desire to diversify away from an increasingly hostile European market, Russia signed the so-called "Holy Grail" gas deal with China, pivoting away from the west and toward with Beijing.

As part of the deal, the two nations reached a $400 billion agreement to construct the Power of Siberia pipeline, which will deliver 38 billion cubic meters (bcm) of gas to China. The compromise was a lower price than Gazprom would have otherwise hoped for, however in taking a cue right out of Amazon, "Russia would make up in volume what it lost in price." This eastern route will connect Russia’s Kovykta and Chaynda fields with China, where recoverable resources are estimated at about 3 trillion cubic meters.

And then today, with little fanfare, Russia's president Putin - whose economy is said to be reeling as a result of a plunging currency, paradoxically something Japan would love to be able to achieve on such short notice - told the media ahead of his visit to the Asia Pacific Economic Conference on November 9-11, that Moscow and Beijing have agreed many of the aspects of a second gas pipeline to China, the so-called western route, or as some already are calling it, the "second holy grail."

We have reached an understanding in principle concerning the opening of the western route,” Putin said. "We have already agreed on many technical and commercial aspects of this project laying a good basis for reaching final arrangements,” the Russian President added.

As RT reports, the opening of the western route, the Altai, would link Western China and Russia and supply an additional 30 bcm of gas, nearly doubling the gas deal reached in May.

Once the Altai route is completed, China will become Russia’s biggest gas customer, able to receive up to 68 bcm of gas annually, surpassing the 40 bcm Russia supplies Germany each year.

 

Furthermore, now that the western embargo against Russia has made any ongoing cooperation between the western majors and Russia, especially in the Arctic region, virtually impossible if only for the time being, Russia has no choice but to entice China to accept the part of the provider of capital investment and technical know how (arguably reverse engineered from the best western firms). Which is why Russia has already offered Chinese companies a stake in large energy fields. In September, Russia’s largest oil company, Rosneft, offered China a share in its second-largest oil field, Vankor in the Krasnoyarsk region in Eastern Siberia. The area is estimated to have reserves of 520 million metric tons of oil and 95 billion cubic meters of natural gas.

“We have built and put into operation an oil pipeline from Russia to China and concluded agreements providing for the increase in crude oil supplies,” Putin said.

 

China will participate in joint exploration and extraction of crude oil and coal in Russia, and work on a jointly funded oil refinery in China has started.

And while Putin will be planning how to further expand the Russia-China energy symbiosis without losing too much of his own leverage, he will be joined by Russia's Foreign Minister Sergey Lavrov, who will reportedly meet with his US counterpart John Kerry. Judging by the recent escalation in Ukraine, the two will have much to discuss.

And yet, it is increasingly the case that Russia is happy to leave the west and its petrodollars behind (something Obama is hardly excited about), instead chosing to be paid in Gas-o-yuans or rubles.

“Strengthening ties with China is a foreign policy priority of Russia. Today, our relations have reached the highest level of comprehensive equitable trust-based partnership and strategic interaction in their entire history. We are well aware that such collaboration is extremely important both for Russia and China,” Putin President said.

And as Europe slowly slides into depression having lost a major trade partner, China's trade with Russia, and obviously vice versa, is surging: overall trade between Russia and China increased by 3.4% in the first half of 2014, reaching $59.1 billion, and the two neighbors expect annual trade to reach $200 billion by 2020. China is Russia’s second-biggest trading partner after the EU.

And just in case the two host central banks opt out of wiring or reciving USD-denominated payments, or are prohibited to do so should SWIFT escalate and expel Russia from the organization, recall that the central banks of the two countries recently signed a three-year ruble-yuan currency swap deal worth up to $25 billion, in order to boost trade using national currencies and lessen dependence on the dollar and euro.

Said otherwise, front page coverage of Russia, and its Chinese pivot, may have slowed down in recent weeks, but the motions behind the scenes are anything but over. And while the developed world is increasingly withdrawing from trade with itself and the BRICs, instead relying increasingly more on outright currency devaluation to boost "wealth", it is the two superpowers of China and Russia that are approaching the future the right way. The "exorbitant privilege" of having their own reserve currency will arrive in due course.

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Freddie's picture

Heads are exploding at The Zio-US State Department and at ZATO.

SoberOne's picture

Seems Russia can always export balls of steal too. That and timezones.

zerozulu's picture

----->in Ruble, Yuan or Gold?

----->in US$

knukles's picture

Everyone has a plan until they get punched in the mouth.
      -guess who?

COSMOS's picture

Will there be any gas left for the Euroshitz?

I guess they can fart and light them up to stay warm.

Also must suck to lose a huge Russian market for the sake of tens of millions of USA Welfare queens.

strannick's picture

''He who controls the world island controls the world''

Russian resources plus Chinese manufacturing and markets, who needs the world. Especially when its only American debt and wars anyway.

America ruins the world to rule it.

Bangalore Equity Trader's picture

Listen.

Funny how they just ignore the USSA. That's what pisses those fucking egomaniacal Americans off the most.

THey "THINK" that they control all in the world. "THINK" American Zero's, think.

Tegrat's picture

World's hard-on for putin and yo-men-ilk gonna bite them not on the ass but in it.

One day they will all fondly remember when Americans ran things.

 

cnmcdee's picture

Like Putin said 'Play time is over.'

Meanwhile Ayatollah Obama the Golfer in Chief will probably be summoned before the house of Rothchild's to explain US failures...

Amerikan Patriot's picture

When Vlad said play time is over, he meant that he's getting cranky and he needs to be put down for his nap.

TahoeBilly2012's picture

Time for ISIS to learn how to cross country ski...

guliaka's picture

Just imagined that. Laughed by butts off. ISIS going into Russia does not have even smallest chanse to survive

zhandax's picture

H/T Pinto; one of the more interesting reads I have come across lately...    http://www.storyleak.com/putin-defies-the-west-leads-brics-alliance-away-from-nwo-reservation/  A bit too ebullient in tone, but consistent with what I have observed.

old naughty's picture

interesting this was referred to by Pinto C. above and then here, in a short space...

here's another one, in a space of 2 days:  http://www.caseyresearch.com/articles/putin-signs-secret-pact-to-crush-n...

coincidence, or all playing out according to an agenda?

StychoKiller's picture

Burnoose, Burkha, tablecloth on the haid ain't no substitute for this... :>D

Anusocracy's picture

"One day they will all fondly remember when Americans ran things."

Sure.

All those countries that were the beneficiaries of the 201 attacks the US did on them are going to remember them fondly.

Idiot.

roddy6667's picture

The Zionists are scared. America is the host and they are the parasites.
The host is dying.

TahoeBilly2012's picture

They are trying to kill the host in a JIT manner. It still make happen. 

tvdog's picture

Where will the parasites go when their host is dead?

COSMOS's picture

I thouht they were already taking Chinese Brides, Look at Mordechai Murdoch and Pimplestein Zuckerberg to name just a few

escapeefromOZ's picture

It is the 2nd time in 80 years . First they killed Germany now it's the USA turn . 

http://www.biblestudysite.com/judeawar.htm

Where will the tribe from hell go ? 

Israhell needs billions to survive every year and people are already escaping from it . May be return to Germany and do their usual crap as usual , infiltration , political control, looting ... destruction ? 

tired1's picture
Leaked report: Israel acknowledges Jews in fact Khazars; Secret plan for reverse migration to Ukraine http://blogs.timesofisrael.com/leaked-report-israel-acknowledges-jews-in...
sun tzu's picture

Maybe the Eurotards can join the USSA in boycotting China next.

roddy6667's picture

They can't go to China, change their name from Kohn to Kerry and hope nobody notices. No Jews in China. They are onto them. They export stuff to American retailers and take thir money, but they are not allowed into any position of influence inside China.

COSMOS's picture

Can't say that Murdoch isnt trying to get a foothold in China, I am sure his two little CHEWIES will be groomed and financed by the World J Congress/Red Shields to take over all media in China in the future

Kirk2NCC1701's picture

"Will there be any gas left for the Eurosluts?"

A: Yes... "We will fart in your general direction and wave our private parts at your aunties -- you English bed-wetting types, you sons of window dressers."

Paveway IV's picture

Another interesting take on Putin taking business away from the NWO reservation. 

Except this is the CIA's take delivered through German media. You already know what the CIA wants everyone to think about Putin. This story is about how fast the German public  DUMPED the major online news outlets when this was revealed. Unintended consequences. Turns out they don't care to be spoon-fed U.S. propaganda. Who would have thought?

I remember back in the day when the CIA's evilness was top-notch and respected by fascists and despots alike throughout the known world.

They must have outsourced in the last decade - quality has gone right down the tubes. 

Freddie's picture

Maybe Amerikans may wake up someday and drop Z-TV and Ziollywood run by Rahm's brother the agent and his pals.

BigJim's picture

 This story is about how fast the German public  DUMPED the major online news outlets when this was revealed. Unintended consequences. Turns out they don't care to be spoon-fed U.S. propaganda. Who would have thought?

I remember back in the day when the CIA's evilness was top-notch and respected by fascists and despots alike throughout the known world.

They must have outsourced in the last decade - quality has gone right down the tubes.

The internet is making their job exceedingly difficult. Most people can't see the bullshit until someone unpegs their nose and then they say - whoa! how did I not see that it's all bullshit? The smell is overpowering!

The internet is the great sinus-clearer. And that's why they're trying to get internet neutrality ended - it's the beginning of getting the tools in place to enable internet censorship.

Escrava Isaura's picture

 

 

Pinto Currency

I think you’ll appreciate this.

 

It’s by “Foreign Affairs”, the journal of the Council on Foreign Relations, that’s as central to the ruling establishment, as you can get.

 

Here’s a ‘Quick’ Excerpt:

Elites in the United States and Europe have been blindsided by events only because they subscribe to a flawed view of international politics. They tend to believe that the logic of realism holds little relevance in the twenty-first century and that Europe can be kept whole and free on the basis of such liberal principles as the rule of law, economic interdependence, and democracy.

But this grand scheme went awry in Ukraine. The crisis there shows that realpolitik remains relevant -- and states that ignore it do so at their own peril. U.S. and European leaders blundered in attempting to turn Ukraine into a Western stronghold on Russia’s border. Now that the consequences have been laid bare, it would be an even greater mistake to continue this misbegotten policy.

 

http://www.foreignaffairs.com/articles/141769/john-j-mearsheimer/why-the-ukraine-crisis-is-the-wests-fault

 

 

Pinto Currency's picture

 

 

Thanks Escrava

Europe and the US seem to understand now the complete stupidity - never mind the destructiveness - of this game played in Ukraine.

And reality waits at the front door with a frying pan to pound Andy Cap at the end of the night.

COSMOS's picture

...the United States had invested more than $5 billion since 1991 to help Ukraine achieve “the future it deserves.” As part of that effort, the U.S. government has bankrolled the National Endowment for Democracy. The nonprofit foundation has funded more than 60 projects aimed at promoting civil society in Ukraine, and the NED’s president, Carl Gershman, has called that country “the biggest prize.”

LOL another AIPAC jobs program success story eh Carl Gershman? Right up there with all the other schmucks in the administration and their Uncle Tobama

The future it deserves according to the US means a total slave to the dollar and lebensraum for the J crew looking for large estates of cheap valuable farmland.  Crimea was supposed to be their Tel Aviv 2.0 but it didnt quite turn out the way they planned, after all Crimea has some of the best coastline, if not the best, to be found in ALL of Europe, Mediterranean or Black Sea.  I am sure Nuland had dibs on some of the Mansions built by the nobility during Czarist times.  She would of gone by her pet name... CZARINA of the CRIMEA, I mean the tribe loves the title Czar, didnt one of them just become Ebola Czar

 

BigJim's picture

Carl Gershman, from Wikipedia:

In 1968, he worked in the research department of B'nai B'rith, and in 1972 he served on the Governing Council of the American Jewish Committee.[5]

Great. Another fucking Irishman.

OW My Balls's picture

Hey Pinto ~ Thanks for that article link <above>. It was fantastic.

kaiserhoff's picture

So Putin can negotiate two pipelines with China in a few weeks,

  and Barry can't handle a done deal with Canada in six years?

How do you say pussy in Ruskie?

Pooper Popper's picture

How do you say pussy in Ruskie?

 

  obama!

kowalli's picture

How do you say pussy in Ruskie? - pussy as a woman organ - pizda

ChiangMai's picture

"...and Barry can't handle a done deal with Canada..."

Well, there's your problem, right there.

kaiserhoff's picture

Well played, Sir.  Lot's of truthiness in that contrast.

logicalman's picture

Two PR shots.

More about the intended audience than anything else.

Still says a lot.

Kirk2NCC1701's picture

I was thinking that O doesn't do well with Canada's national animal: the Beaver (biol. Castor Canadensis), which sounds an awful lot like a "Canadian castration".

sun tzu's picture

It's not that Obozo can't close the Keystone pipeline deal, it's Uncle Warren doesn't want it closed. He's making a fortune having the oil brought over by rail. 

Kirk2NCC1701's picture

Bingo! A few of us (myself included) have made the same observation last year.

Nice to see an informed blogger, not just an opinionated one. :-)

SoDamnMad's picture

Kaiserhoff

If you  read the first sentences it says Russia is getting well less than what it gets from Europe for gas.  It also doesn't say who is paying for the pipeline and infrastructure. In the first pipeline Russia was paying for the pipeline , pumping stations (equipment possible sanctioned hence they will have to use the Chinese "knock-offs") right up to the border and China was paying for the distribution network within China. Since Russia is sucking for capital it seems the second pipeline will also be nearly free gas and China will up front some of the infrastructure in Russia.  This really doesn't sound like a win-win for Russia in either pipeline. Just saying.  How is the weather in St. Pete?  +4

Freddie's picture

Unbiased?  LOL!  The Aussie and NZ See Eye Aye newspapers reported JFK's murder by LBJ-MIC before any bullets were even fired.  They screwed up the timing on that one.