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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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Sun, 11/09/2014 - 20:19 | 5430699 Hamm Jamm
Hamm Jamm's picture

I don't hate putin...  but if the corporate news starts to push this guy up and in our face...  well just run him down ...    to be honest i don't give a flying F about putin and i don't think very much of his leadership or grandstanding ..  but the russian shills on here just love it ...    hahahaha

Sun, 11/09/2014 - 20:12 | 5430684 Volkodav
Volkodav's picture

as for retakings...

your post is inane

you lost your wits...if ever had..

better go looking

Sun, 11/09/2014 - 20:21 | 5430706 Hamm Jamm
Hamm Jamm's picture

You got....   da brokeen...   englisz ....  dat makez ...  noooooo zence

just goose step your commi azz back to cabbage land...   !!!

Sun, 11/09/2014 - 12:57 | 5429564 Hongcha
Hongcha's picture

I wonder how the effeminate, treasonous, venal U.S. administration will deal with this.  I own a large position in OGZPY; it is wildly undervalued.  I think it is the buy of the decade.  .gov has pulled out all stops to denigrate and interfere, all for the sake of the petrodollah and their true contituents (Israel, Qatar, SA) but has avoided direct attack on Gazprom's NG network.  And for good reason; a direct sttack would start ww3 nice n' hot because it would be a strike at the heart of Russia's economic life.

I'm going to feel the pain of the demise of the petrodollah but I have been diversifying for years.  The U.S. had best get its collective head out of its ass, remove the current eunuch administration from the table and work like sober men to compromise before it is too fucking late.

Sun, 11/09/2014 - 14:33 | 5429873 22winmag
22winmag's picture

Head out of ass = a genuine military coup in the U.S. is needed, unlike the warfare/welfare coup in November 1963.

Sun, 11/09/2014 - 17:00 | 5430213 Volkodav
Volkodav's picture

are you in US?

where do you get your view of Gazprom?

I always want more perspectives.

Some American analysts insist Gazprom is poorly managed...

but don't state their case for that...never answer my email asking for explanation

 

Sun, 11/09/2014 - 21:43 | 5430906 Hongcha
Hongcha's picture

Volkodav; I am an American in the U.S.  I have no ideas about Gazprom's management; only its assets and its position.  The share price could quadruple tonight and it would still be a screaming buy...

Sun, 11/09/2014 - 13:17 | 5429612 Platypus
Platypus's picture

Well....those deals are made in the assumption China will keep selling their junk at or near current levels. The problem is that the dollar will raise long term. A strong dollar puts American industries in advantage here inside the USA. A strong dollar also squeezes emergent countries because they get less dollars for their products. So for the future I see domestic industries getting stronger due to domestic consumption, and china reserves going down due to less dollars and more competition. Less dollars and more competition means that China may not need all this energy they are gambling on.

Sun, 11/09/2014 - 16:06 | 5430099 Volkodav
Volkodav's picture

short sighted...remember post war Japan was made fun of selling tin trinkets..

then took many markets  

Chine made the parts many for car, pc, phone and many other you rely on if you average consumer.

I am not like of either of these countries, especially...but,

China make more than junk..

their weakness is they are mostly copiers from others

 

better worry that Americans especially have weakness to buy junk...must have it

 

 

 

Sun, 11/09/2014 - 22:16 | 5431004 Platypus
Platypus's picture

Japan grew with American capital and American consumption just like China. But Japan never made deals with American enemies. Thats where you are missing the point.

Mon, 11/10/2014 - 02:39 | 5431501 silvermail
silvermail's picture

Thus, you acknowledge that you see Russia as an enemy of America?
It's a Freudian slip, is not it? LOL

Sun, 11/09/2014 - 13:48 | 5429721 viedoklis_lv
viedoklis_lv's picture

And what is the price has not been said. It means - deal was political and chinese won again.

Sun, 11/09/2014 - 14:23 | 5429844 Rock On Roger
Rock On Roger's picture

Take a closer look at the article. It states the price.

Sun, 11/09/2014 - 14:58 | 5429945 silvermail
silvermail's picture

It means - deal was political and West led by the United States lose again.

Sun, 11/09/2014 - 15:52 | 5430070 Volkodav
Volkodav's picture

nyet

can you ever find facts?  Or just weak emotions?

Sun, 11/09/2014 - 14:38 | 5429892 22winmag
22winmag's picture

If the U.S. Empire really is crumbling, there are going to be a many millions of heavily-armed, highly motivated American veterans and civilians still in place and terribly pissed off, until such time as they are forcibly removed.

 

Good luck with that.

Sun, 11/09/2014 - 14:43 | 5429910 viedoklis_lv
viedoklis_lv's picture

For those who understand russian. What will be Russian & Chinese relationship.

http://youtu.be/0-xbiHz9ozY

Sun, 11/09/2014 - 15:19 | 5429986 silvermail
silvermail's picture

If Siberia will belong to China, it means that the never West and the US can not be masters of natural resources Siberia.
Isn't it great ?! No. It's just super gorgeous!

Sun, 11/09/2014 - 15:08 | 5429967 gibons
gibons's picture

win win for everyone involved, Russian oligarchs with Putin in front just signed a new "Sochi" to make and wash billions of dollars, Chinese got severely underpriced gas as Russians are in desperation to find friends now. The only loser is the Russian nation, which will pay for the construction and will be selling its resources at a loss, but who cares about them ?

Sun, 11/09/2014 - 15:38 | 5430035 silvermail
silvermail's picture

You're so much like the Russian people, who chose Putin?
So, you also much like Putin - as the democratic choice of the people of Russia, is not it?
Or do you have problems with the logic?

Sun, 11/09/2014 - 15:43 | 5430045 Rock On Roger
Rock On Roger's picture

The price that China will pay Russia for gas is 2.5 times greater than the current North American gas price.

 

How is that 'severely underpriced gas'?

 

Sun, 11/09/2014 - 15:50 | 5430061 Volkodav
Volkodav's picture

useless talkings

Sun, 11/09/2014 - 15:10 | 5429968 Jack Burton
Jack Burton's picture

 

All is not well in the EU and Ukrainian paradise. "

"Despite all the blood being shed in the east of Ukraine, both are quite willing to cooperate on blackmailing Europe," one senior diplomat from an EU state said of the gas deal. "No matter how much you give them, they will always ask for more."

 

Also urgent will be efforts by the new Ukrainian government to enforce EU economic and social norms in legislation required if a free trade deal is to take full effect on Jan. 1, 2016.

The EU has lifted duties on imports from Ukraine but let Kiev keep tariff protections for its own businesses, which also trade freely with Russia. But, EU officials warn, that one-sided favor cannot last long and Ukraine must honor its commitments.

"Ukrainian oligarchs have the best of both worlds," said the senior EU official, adding that businesses from Polish factories to French wheat farmers had begun to grumble about unfair trade."

The more the EU does for the poor peace loving Ukraine, the more they take. Oligarchs are playing the EU for fucking fools. Most money aid the EU sends to Kiev, goes right into Oligarchs and Neo-Nazi pockets, while Kiev always asks for more and more. EU, big sucker fools!

Sun, 11/09/2014 - 15:48 | 5430056 silvermail
silvermail's picture

EU, big sucker fools?

I do not think so. They are not fools. They just vassals of Washington. They long ago abandoned their sovereignty and pass it for uses to Washington. Where their sovereignty now, used like a cheap whore.
"Fack EU", is not it?

Sun, 11/09/2014 - 16:29 | 5430138 q99x2
q99x2's picture

Looks like the executes over at the NWO are about to have their TPP shit canned. Everybody hates the NWO.

Sun, 11/09/2014 - 17:26 | 5430263 falak pema
falak pema's picture

Who is Putin in the current context : Just read this on his role model in ancient history.

He wants to go down in History as Saint Putin !

Saint Alexander Nevsky, Russian Aleksandr Nevsky, original name Aleksandr Yaroslavich   (born c. 1220Vladimir, Grand Principality of Vladimir—died Nov. 14, 1263, Gorodets; canonized in Russian Church 1547; feast days November 23, August 30), prince of Novgorod (1236–52) and of Kiev (1246–52) and grand prince of Vladimir (1252–63), who halted the eastward drive of the Germans and Swedes but collaborated with the Mongols in imposing their rule on Russia. By defeating a Swedish invasion force at the confluence of the Rivers Izhora and Neva (1240), he won the name Nevsky, “of the Neva.”

Alexander was the son of Yaroslav II Vsevolodovich, grand prince of Vladimir, the foremost among the Russian rulers. In 1236 Alexander was elected prince—a figure who functioned as little more than military commander—of the city of Novgorod. In 1239 he married the daughter of the Prince of Polotsk.

When in 1240 the Swedes invaded Russia to punish the Novgorodians for encroaching on Finnish tribes and to bar Russia’s access to the sea, Alexander defeated the Swedes at the confluence of the Rivers Izhora and Neva. His standing enhanced by his victory...

What he does in Ukraine his model did at the battle of the Ice. And, Alexander N was faithful ally of the Mongols....

History repeats !

Sun, 11/09/2014 - 17:55 | 5430338 Herdee
Herdee's picture

Now you know why the Communist Chinese Government owns so much American Government debt and the biggest Gold Reserves in the world.Old corrupt Uncle Sam can go on continuing his global war agenda while it goes broke.Obuma under instructions from the neo nazi State Department will run the debt to 20 Trillion.Kerry was over warning Korea and Australia not to join China's new system that will compete against the totally abusive IMF in a last ditch SE Asia effort in order to at least come home with something for Obuma.It's like a last ditch effort to stay afloat with any degree of interest to anybody in the U.S. Petro Dollar system created by Henry Kissinger in order to recycle U.S. Dollars into America after destroying the Gold Standard.Guess what?Tony Blair,former Prime Minister of England is doing secret oil deals behing the scenes on behalf of the Saudis.The oil is going to China.Money will corrupt any politician. Double-Crossing the Americans and setting up deals outside the Dollar System.This is the same whacko that took England into Iraq with the Americans in order to get at Iran?All to make a buck or two...what a dirty basturd...after thousands lost their lives and got injured.Wake up veterans.

http://www.dailymail.co.uk/news/article-2827263/Blair-signed-secret-cont...

 

 

Sun, 11/09/2014 - 18:12 | 5430383 MKD
Sun, 11/09/2014 - 18:01 | 5430356 Pressfiretostart
Sun, 11/09/2014 - 19:15 | 5430549 TweedleDeeDooDah
TweedleDeeDooDah's picture

Please build pipeline to China Now, from where is China Future.

Ha ha ha... pee-pee in coke, all over again, but Russia!

Sun, 11/09/2014 - 19:43 | 5430604 chindit13
chindit13's picture

Perhaps this deserves an article here.  Oh, maybe not.

www.bellingcat.com

Sun, 11/09/2014 - 20:16 | 5430693 Pressfiretostart
Pressfiretostart's picture
My life in Russia: Bobby Rome from Virginia, USA

http://www.youtube.com/watch?v=zsHIxcWdgoM

Sun, 11/09/2014 - 20:52 | 5430780 Pressfiretostart
Pressfiretostart's picture

Imagine how different the world would look if we had the internet back in 1938- WWII would have probably never happened.

https://www.youtube.com/watch?v=jSOfQ7tgTLg&channel=UCJqij87ROc-51uGttLv...

Sun, 11/09/2014 - 22:15 | 5431005 Runs-With_Toast
Runs-With_Toast's picture

Its all falling apart for the USa. Obola looks impotent.

Mon, 11/10/2014 - 12:00 | 5432446 Bankster Kibble
Bankster Kibble's picture

If this latest deal works out well, then it becomes a stepping stone to the really big deal: a pipeline from Altai through China to another BRICS country, India.  Up to now it has just been a nice daydream, a $50 billion daydream.  But at the pace Russia and China are making deals, the daydream may come true in the next year or two.

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