Sunday, May 25, 2014

Russia's Pivot to China With Monster Gas Deal

THERE had been plenty of time to negotiate a deal—more than a decade, in fact. What Russia and China needed was the right amount of pressure to seal it. That came in the form of Western sanctions on Russia over Ukraine. Eager to show America and Europe that he has other friends to turn to, Russia’s president, Vladimir Putin, on May 21st in Shanghai, secured a long-term agreement for Gazprom, a state-owned Russian firm, to sell natural gas to CNPC, a state-owned Chinese one. The final details of pricing—the main sticking point—were not released but the deal is thought to be worth about $400 billion over 30 years. It gives Mr Putin a much-needed strategic boost as he confronts those sanctions and suffers increasing isolation from the West.

China had reasons of its own to strike a deal.

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