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China Will Become the Largest Customer of Russian Gas

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Valve sales
2017/09/21 09:23
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[Abstract]:
RussiasignedthesecondframeworkagreementofgassupplywithRussia,whichwasthesecondlargestcontractinthisyear.ForagainstbeingisolatedbytheWestern,VladimirPutin,theRussianPresidentbegantoseekforallyingwithCh

Russia signed the second framework agreement of gas supply with Russia, which was the second largest contract in this year. For against being isolated by the Western, Vladimir Putin, the Russian President began to seek for allying with China on investment.When the newly-signed contract begins to operate, China will become the largest customer of Russian gas which exceeds Germany. 

According to the agreement reached by CNPC and Gazprom, Russia will supply extra 30 billion cubic meters per year of gas to China from the western of Siberia through Altai gas pipe. The contract will last for 30 years. Alexey Miller, the CEO of Gazprom expressed that based on partial content with CNPC, Russia will began to supply gas to China in the next four to six years. More details about the contract will continue to being negotiated by two sides in the future.

Previous that, China had already signed 400 billion dollars contract with Russia in May. Gazprom will provide 38 billion cubic meters per year of gas to China from the eastern of Siberia. 30 billion cubic meters of gas in this contract is less than that in last contract. Definite price is also unclear. Gordon Kwan, Manager of Energy Research of Nomura Securities in Hong Kong expresses that the total volume in two contracts will account 17% of Chinese total gas consumption before 2020.

Signature of the contract also means that China support Putin on diplomacy and finance. Because of Russia support separatism in Ukrainian conflict, the Western carried out a series of sanctions on Russia. Both Russian energy export and exchange rate of ruble suffered from losses. Analysts consider that China will provide assistance to Russia on high cost pipe construction.

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