Russia, China Sign Second Mega-Gas Deal: Beijing Becomes Largest Buyer Of Russian Gas

Tyler Durden's picture

As we previewed on Friday, when we reported that "Russia Nears Completion Of Second "Holy Grail" Gas Deal With China", moments ago during the Asia-Pacific Economic Cooperation forum taking place this weekend in Beijing, Russia and China signed 17 documents Sunday, greenlighting a second "mega" Russian natural gas to China via the so-called "western" or "Altay" route, which as previously reported, would supply 30 billion cubic meters (bcm) of gas a year to China.

Among the documents signed between Russian President Vladimir Putin and Chinese leader Xi Jinping were the memorandum on the delivery of Russian natural gas to China via the western route, the framework agreement on gas supplies between Russia's Gazprom and China's CNPC and the memorandum of understanding between the Russian energy giant and the Chinese state-owned oil and gas corporation.

“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.”

RIA adds, citing Gazprom CEO Alexei Miller, that the documents signed by Russia and China on Sunday define the western route as a priority project for the gas cooperation between the two countries.

"First of all these documents stipulate that the "western route" is becoming a priority project for our gas cooperation," Miller said, adding that the documents provide for the export of 30 billion cubic meters of Russian gas to China annually for a 30-year period.

Miller noted that with the increase of deliveries via the western route, the total volume of Russian gas deliveries to China may exceed the current levels of export to Europe in the medium-term perspective. In other words, China has now eclipsed Europe as Russia's biggest, and most strategic natural gas client. More:

Miller, who heads Russia's state-run energy giant, told reporters that "taking into account the increase in deliveries via 'western route,' the volume of supplied [natural gas] to China could exceed European exports in the mid-term perspective."


This came after Russian and Chinese energy executives signed on Sunday a package of 17 documents, including a framework deal between Gazprom and China's energy giant CNPC to deliver gas to China via the western route pipeline.


Miller said Gazprom and CNPC were in talks on a memorandum of understanding that would see Russia bring gas to China through the western route pipeline, as well as a framework agreement between the two state-owned companies to carry out the deliveries.

The western route will connect fields in western Siberia with northwest China through the Altai Republic. Second and third sections may be added to the pipeline at a later date, bringing its capacity up to 100 billion cubic meters a year.

The facts and figures of the Altay deal are broken down in the following map courtesy of RT:

Also of note, among the business issues discussed by Putin and Xi at their fifth meeting this year was the possibility of payment in Chinese yuan, including for defense deals military, Russian presidential spokesman Dmitry Peskov was cited as saying by RIA Novosti. More from RIA:

Russia's President Vladimir Putin and China's President Xi Jinping have discussed the possibility of using the yuan in mutual transactions in different fields of cooperation, Kremlin spokesman Dmitry Peskov said Sunday.


"Much attention has been paid to the topic of mutual payments in diverse fields ... in yuans which will help to strengthen the yuan as the region's reserve currency," Peskov said commenting on the meeting held between Putin and Xi on the sidelines of the Asia-Pacific Economic Cooperation (APEC) summit in Beijing.


On October 13, Russian Economic Development Minister Alexei Ulyukayev announced that Russia was considering Chinese market to partially substitute access to the financial resources of the European Union and the United States.


The European Union and the United States have imposed several rounds of economic sanctions on Russia over its alleged involvement in the Ukrainian crisis, a claim Moscow has repeatedly denied. The restrictions prohibit major Russian companies from seeking financing on western capital markets.

Meanwhile, as China and Russia keep forging ahead in a world in which the two becomes tied ever closer in a symtiotic, dollar-free relationship, this is how the US is faring at the same meeting: "China, U.S. Parry Over Preferred Trade Pacts at APEC: Little Progress Made on Separate Trade Deals at Asia-Pacific Economic Cooperation Forum."

The U.S. blocked China’s initiatives because it worried that launching FTAAP talks would impede progress on a separate trade deal, the Trans-Pacific Partnership. The ministers’ statement said that any FTAAP deal would build on “ongoing regional undertakings”—a reference to TPP and other regional trade deals.



The Chinese got all they could expect—a reaffirmation that we all share in the vision of having a regional integrated model” for trade, said U.S. Chamber of Commerce Executive Vice President Myron Brilliant.


U.S. Secretary of State John Kerry said Saturday that negotiating the TPP “is a battle that we absolutely must win.” Ministers from the 12 TPP nations met Saturday afternoon to try to narrow differences, including disputes between the U.S. and Japan over agriculture and auto trade. On Monday, the leaders of the TPP nations are again scheduled to discuss the trade deal, although no breakthrough is expected.


The U.S. is trying to tie an ITA deal to progress on other trade deals with China, as a way to increase its leverage with Beijing. “How the ITA negotiations proceed is an important and useful data point” on China’s ability to negotiate an investment treaty with the U.S., Mr. Froman said.


Trade analysts say the U.S. also hopes to use China’s desire to have the Beijing conference produce concrete results as leverage. This is the first major international summit held in China since Xi Jinping took over as Communist Party chief in 2012, and the government wants to use the session to affirm China’s greater role in the world.

Good luck trying to "increase US leverage with Beijing" using a trade conference being held in Beijing as the venue.

In other words instead of actual trade agreements, the US merely jawboned and "shared visions."

Then again, as noted here since 2010, in a world in which one can merely "print one's way to prosperity", what is the need for actual trade? Surely, which China and Russia are expanding their commercial ties at the expense of Europe, the US can continue to pretend it is the world's only superpower and has no need for either Russia or China. After all, Mr. Chairmanwoman can always go back to work and print some more of that "world reserve currency."

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JustObserving's picture

Obama causing energy insecurity in Europe and uniting US opposition.  Obama always wins. Maybe he can start bombing an eighth Muslim country

In other news:

Winston Churchill wanted to nuke Kremlin ‘to win Cold War,’ FBI memo reveals

A secret memo from the FBI’s archives has revealed that Britain’s Winston Churchill once urged the US to drop an atomic bomb to "wipe out" the Kremlin. He reportedly thought it was the only remedy against the spread of communism to the west.

The FBI memo claims Churchill insisted that the "only salvation for the civilization of the world would be if the President of the United States would declare Russia to be imperiling world peace and attack Russia."

A little known fact is that Churchill deliberately starved 4 million Indians in World War II accounting for more 90% of the casualties of the British Empire

War criminals will remain war criminals.  Some even win Nobel Prizes.

Publicus's picture

It appears that China will stop buying middle eastern oil/gas and switch to Russia. A wise move as the middle east is about to turn to glass.

Seasmoke's picture

I don't like the Chinese. I don't even think they are all that smart. But they do know how to see the big long term picture and for that they are very wise.

actionjacksonbrownie's picture

In other news...


Canada has signed an agreement to bypass the U.S. dollar in international trade with China, and will trade using the Chinese Renminbi.


Canadian Spring uprising in  3..2..1...

Slave's picture

Oh dear, what will the Russians do without ZATO?

y3maxx's picture

...Potential Black Swan Game Changers...
Bomb and close the Suez Canal
Bomb and close the Hormuz Straight
Bomb Qatar to heck
Bomb and take out the Gas line that bypasses Hormuz.
...and what pray tell can the USSA do if a small nuke is dropped over N Y or Washington?
There are various Jihadists that would jump at the chance of USSA payback.

strannick's picture

Hard for the USNavy 5th fleet to mess with landlocked gas pipelined supplies between nuclear powers Russia and China on the World Island.

Russia and China's free trade between sovereign nations. What a concept. Something America will fight to thwart at all costs.

Jack Burton's picture

Bingo! Great point there. Indeed, the US Navy is so powerful it does control every inch of the ocean trade routes and can shut anyone of them in a heart beat. China knows how vulnerable they are, if Washington really got mad at them, the USA could stop every tanker on earth in a matter of a couple days work. So you are right, China sees land lines to it's industry as vital. These can be protected by the Chinese and Russian armies, and by the large anti aircraft missile forces of both nations. It is a win win for both. Obama and the neocons are really pissing themsleves over this one, I can assure you of that. Does anyone remember a few months ago when Obama directly asked China to join in the world wide sanction of Russia for invading Ukraine? How far did that invitation move the Chinese? They just the opposite, they jumped on teh sanctons to use as bargaining power with Russia to barter better deals on gas prices. A piont of conflict between Russia and China for over a decade. Now prices are more to China's liking, thanks to USA sanctions. European demand is now replaced by Chinese demand. And no fucking Ukraine Kiev Junta can do jack shit about it.

Who losses? Germany! Yet Merkel is wholly black mailed by the NSA, if she refuses to back Washington, the NSA can dump a load of information on her that will see her out of power in 2 fucking seconds!

IronForge's picture

Correction, Mr. Burton.

Davey Jones can't conttol:

1) The Russian side of the Arctic, which due to Global Warming, may become a Summer Sea Route btwn East Asia and Europe; and

2) The Asian Subcontinent, AKA Indian Territories.  "Asia <=> Africa/Europe/ME" Trade Routes South of Eurasia end up passing across there.  Last time I checked, the Indians have armed up with long range Cruise Missiles to complement their modernizing Navy and Air Force.   Not to mention that it's far more palatable to detonate a Fleet crippling low/mid yield Nuke at Sea than on Land against an invading Army. 

Also, SE Asia (east of SGP) is soon becoming a "Toss Up rather than a Standoff" for the USA.  CHN just may be able to pull off a Power Play to become "THE" Dominant Naval Force there.   They're building "Island Bases" in the Region; and I think they'll build larger/more numerous Facilities to counter what the USA has in Guam.

You can say that the "Mid Eurasia" Region (even with Diego Garcia figured in) is pretty much the outer fringes of US Military's Power Projection Prowress.

Volkodav's picture

dup  missles matter more than ships

if it floats, is sitting duck




Oracle 911's picture

This deal is really loud "Fuck the West/USSA!".

Lore's picture

It's a defensive reaction to PSYCHOPATHOLOGY on the part of "Anglo" policy writers with a MACROECONOMIC DEATHWISH.

"On October 13, Russian Economic Development Minister Alexei Ulyukayev announced that Russia was considering Chinese market to partially substitute access to the financial resources of the European Union and the United States."


Paveway IV's picture

And a gold-backed currency matters more than missiles, ships, or anything else.

If it's not gold-backed like the Altyn, then the currency is a sitting duck.

Eurasia didn't even have to show up to WWIII - America and the EU came by themselves, let their central banks bleed them dry and then LOST

Jack Burton's picture

Indeed! That is why I was in Submarines!

The Chief's picture

Im just waiting for China and/or Russia to announce that their intelligence agencies have uncovered the fact that ISIS has obtained a submarine and that it is unknown at this time what weapon capability that ISIS may have obtained in said submarine. As good global citizens, they are only doing their duty to the world by informing us, dont ya know.


The Chief's picture

I mean if ISIS can obtain supertankers full of "stolen crude" to finance their villainous deeds without ANY intervention by TPTB, surely there is some rogue Lockheed or Boeing employee willing to help them obtain a diesel boat from one of their german friends, no?

IronForge's picture

ISIL just might:

1) Start Hijacking Tankers (e.g., Iranian - just to piss them off - yet IRQi and KSA Tankers headed for the USA-Led-Bombing-Coalition sounds just as obvious for their targeting); and

2) BUY PRK's latest refurbishment (or plain old re-manufacturing) of SLBM capable Diesel Boats (Submarines); and operate them out of sympathetic Ports (someone's buying their Oil, right?).

Plenty of Pirates from the East African Coast through the Malaccan Straits.  Heck, even IND may even pay up for some non-IRNian Tanker Payload.

Pirate Caliph of the Southern Seas?  Sounds like a Title for an early 20th Century Adventure Romance Movie or for a Fabio covered Pulp Fiction piece for the Lonely Ladies - who want to relive the Fantasy depicted in the Sex in the City 2 Movie(I only saw the first 15-20 Min while Channel Flipping, so I'm presuming the Dames had their "Fantasy Flings" over there). 


The Chief's picture

Sounds plausible....maybe we should stop bombing them lest they unleash a MK48 at one of our carriers. I mean, you know, they have all kinds of capabilities....even operation of a submarine and advanced weapons systems.

I saw where they now were operating fighterbombers. Did they do a Rosetta Stone-type single seat fighter training school? or Microsoft Flight Simulator? Or did they just ask their masters over yonder to the SE by about 100 clicks to give them a crash course?

What a fucking joke.

IronForge's picture

If you've read up on the Links provided by ZH Readers, you probably would have read that they actually had Fighter Pilots who flew  planes teach them.

Tankers have been taken over by men with small arms and Speedboats.

Also, PRK do have Torpedoes.   Probably not Mk48 Caliber (ROTFL); but good enough to cause panic for the Merchants.  Get close enough in a crowded place (like the Straits of Hormuz), even a WWII Era Torpedo can score a hit.

SYR  mothballed a couple of Romeos.  If ISIL gets their hand on them (they almost got their hands on the City of Tripoli near the Coast), who knows what they can do.

All of their Oil Customers are potential Weapons Smugglers...

zerozulu's picture

we should have our wood-stove ready.

Volkodav's picture

BlazeKing King by far the best

angel_of_joy's picture

Just wait until the Chinese and the Russians start talking about MILITARY cooperation, and also SPACE cooperation (as in permanent operational space presence/bases). Then you'll see a true American nervous breakdown... Of course, by that time "The West" (i.e. US, EU & Japan) will be even more (totally ?) bankrupt, so their reaction will HAVE to be limited, not by choice but by necessity. Those will be "interesting times" indeed...

Dakota Kid's picture


"Sanctions have a boomerang effect and without any doubt they will push U.S.-Russian relations into a dead end, and cause very serious damage, and it undermines the long term security interests of the US State and its people."

It looks like Putin was right.

Sirius Wonderblast's picture

Indeed - the US seems to love free trade but only when it is in US interests.

Holleyman's picture

Is it already time to burn the white house again?

SamAdams's picture

China is not even worried about how to get rid of their dollar assets.  Will the new BIS have an Asian country code?

Escrava Isaura's picture




The Chineses are very smart. Very resourceful. They’ve survived for thousands of years.


This tells us that war is coming to Europe. I read that Germany alone gets about 40% of its energy from Russia.


Russia will be in a horrible, and dangerous position. From the West they have 500 million delusional Europeans. From the East, they will be facing invasion from over 1 billion people that have very little to lose.



eishund's picture

You forgot the north. The Polar Bears will turn the taiga white.

But wait, Putin did say the Taiga Bears will be pretty territorial.

Bangalore Equity Trader's picture

Listen EI.

"500 million delusional Europeans. From the East, over 1 billion people".

Easy for The Russians. What else ya got?

Escrava Isaura's picture



Bangalore Equit...

Are you always this entertaining… or, it’s just me?


Anyway, few years back I was going crazy on why: “Some of my smartest friends don’t want to understand and accept our current situation and facts for what it is”.



Then, I asked this question in a blog, that I can’t remember where, and these two bloggers wrote back this: Watch “Sigmund Freud” and read “Reg Morrison”.


A neurologist [Freud] and a photographer [Morrison]?

If I didn’t know these two bloggers any better I would had though they were kidding me. Anyway, since then, things look a lot clear to me.


Widely acclaimed Sigmund Freud is a must watch. BUT, Reg Morrison, the photographer was a huge surprise. HE IS UNBELIEVABLE and FASCINATING. In a league of his own. Can’t say highly enough about his writings and research.


Let me introduce to this brilliant mind, and intellect.


The Peacock Effect – Slide 24 

Evolution's great strength lies in the fact that even the most efficient and fecund species are available for culling. This universal vulnerability hinges on what might be called the Peacock Effect.

In Peacock society the male's spectacular tail is a major reproductive asset, but only in the species' birthplace—a forest. Should the forest disappear, the peacock's cumbersome tail instantly doubles as a gaudy advertisement for fast food for passing predator.

All species [humans] possesses adaptive specialisations [their Peacock] that have enabled them to survive and reproduce within the habitat that nurtured their specialisation. But change the environment, and such specializations become handicaps—the more extreme the specialisation [their Peacock], the more lethal the handicap.  


OUR PEACOCK TAIL IS OUR INHERENTLY MYSTICAL NATURE. It is expressed in our peculiar capacity to believe implicitly in the patently unbelievable, and to attribute unnatural power or mystical significance to anything that either contributes to, or threatens, our genetic survival—thereby revealing its true origin. Mysticism's universality and its umbilical links to DNA's primal imperatives, 'survive and reproduce', clearly identify it as a genetic artefact.  

Whether our mysticism relies on a belief in supernatural forces such as gods, angels, witchcraft, astrology and intergalactic aliens, or whether we believe in luck, tea leaves, memes or market forces, the precise nature of the belief is of little consequence to our genes. The only thing that matters to them is the quality and strength of the tribal passion that those beliefs generate. Darwinian selection does the rest. Two million years has honed HUMAN MYSTICISM INTO A WEAPON OF UNPARALLELED POWER.



booboo's picture

Ahh, Darwin, The 19th century version of Al Gore. 

Escrava Isaura's picture




The ideas of these posts are: “Awakening of the retards from Brainwashing”. You comment shows that you’re a functioning human being that is completely brainwashed.


Knowledge is liberating, isn't it?


Now, see if you can write something insightful.



booboo's picture

Dunce, Brainwashing is done by supplanting the truth or science in this case with false theories, you sir are in need of a self examination and a good deprogramming
Start with "the Cambrian Explosion"

Bangalore Equity Trader's picture

Listen booboo.

He's just another transparent tribesman attempting affect the message.

I respond to his comments but whenceso I put on my finger condoms first:

Then I carefully hit the "REPLY" button and type my comments. You can never be too cautious with "THESE" types.

When finished I, in Ebola like fashion, discard finger condoms in biohazard containment bags.

CrazyCooter's picture

I typically don't follow links on ZH much anymore, but it looked tempting. This guy is very interesting:

Not sure if I will agree/disagree, but I am definately going to check out a few of his papers.



Sokhmate's picture

If evolution was true, my left hand would have turned into a vagina by now

Phuk u's picture

You must have a right-handed mouse then Sokh :)

Sokhmate's picture

Fuck u,  you are correct sir 

Oldballplayer's picture

I logged in, which is a pain in the ass, just to upvote and copy this for my "treasures found on the interwebs" notebook entry.

Volkodav's picture

answer to off topic...but

most will have better grasp of this


Jack Burton's picture

Escrava, That is why Russia maintains it's very large nuclear forces and is now putting new Fleet Ballistic Missile Submaries into commission as fast as they can be built. They will make sure that no missile defense can prevent Subs from rising from the sea bottom a week after the Russian state was attacked, and nuke all hell out of anyone and everyone they see fit to nuke. Nukes are insurance, not meant for rel use, but as that nice little insurance policy that says. "If you try and really take us down, you will be a smoking cinder within any time frame we choose."

Escrava Isaura's picture



Jack Burton

I hear, and understand your point.

And, maybe by Russia having as many submarines, it might work in the best interest of everyone.

But, US Empire and its spoiled population, and Europe with theirs, won’t go down quite.

And that, their pillage of the world and its resources are over.

Try to engage anyone within this topic? You’ll only hear silence, and will make people really uncomfortable. Women won’t even let you finish the sentence.


Chris Hedges:

Decayed civilizations always make war on independent intellectual inquiry, art and culture for this reason. They do not want the masses to look into the pit.

This obliteration of “false hopes,” requires an intellectual knowledge and an emotional knowledge. The first is attainable. The second, because it means that those we love, including our children, are almost certainly doomed to insecurity, misery and suffering within a few decades, if not a few years, is much harder to acquire. 



Oracle 911's picture

Well 1st they have to get there, and how the last 3 attempt ended? I mean Napoleon, the WWI and the WWII.


Sirius Wonderblast's picture

Try telling the many millions of un-employed in southern Europe how spoiled they are. You might find it an education. Don't think Catalans would be voting for secession if the good times were rolling.

Lea's picture

"Russia will be in a horrible, and dangerous position. From the West they have 500 million delusional Europeans. From the East, they will be facing invasion from over 1 billion people that have very little to lose."

You are missing two points: 1) there are not 500 millions of deluded Europeans. More like 498 millions of disappointed Europeans who hate the turn of events in Europe, i.e, its vassalization to the USA, and 2 millions who profit by the situation. You should read the comments section under any European news outlet, it's even worse than here at ZH. And the European masses are by far and away more educated than the American masses, so their gullibility reaches their limits faster. On top, the countries of Europe all know the meaning of war on their territory, something America doesn't. The last thing we Europeans want is another war with Russia, so barring some drunken Poles, thank you but no, thank you.

2) As for the Chinese, they are not an imperialistic nation. They hate any meddling in their internal affairs, but they won't attack if not provoked. They are, after all, the only country ever that has built a wall around the whole of its territory, in an attempt to fortify it against external aggression. Fortifications are defensive, not aggressive. 


Escrava Isaura's picture




#1) I’ll take your word for it because I don’t follow Europe closely. And your post makes sense.


#2) Agree. Not sure if Chinese will remain neutral if Russia is invaded from the East.



Russia will eventually be invaded during the “Coming Anarchy” after the war.


I bet there will be lost of ‘closed doors’ meeting trying finding solutions for our oil and energy demise. But, eventually, these meeting will work until they don’t.


And the ones without the oil and energy, will start facing shortages…. And that’s your anarchy.



Razor_Edge's picture

Here's another undeluded European. Does this lunatic think for a moment that the average European would contemplate with equanimity for a second a military conflict with Russia?  Apart altogether from the fact that 500 millions Europeans are Europeans because we reside within what I presume he is referring to primarily as the EU? We may be EUans, but we are I think, primarily Irish, French, German, Brits etc etc etc.There is no such thing as an EU military force, not even a collection of military forces that could project convincing force any appreciable distance outside the EU area that would threaten Russia. And that's without even thinking of Russian Nuclear forces which, according to their military doctrine, would be unleashed in response to any serious attack.

I accept that the scum leading Europe now, both within the EU and at national level in many EU countries are bought and paid for by the same scum that owns the US. But I don't believe for a second that the populace of Europe are putty in the hands of this scum. They may not have revolted as yet, but there is a very fine line, and we may be much closer to it now than many believe.

Oldballplayer's picture

OK, without heat this winter, how many Europeans is that?  And how many of those left alive are willing to march on Russia?

The Chinese in the East are used to living in shit circumstances.  They won't even know things are "bad."