Putin And Xi Sign Massive Gas Deal On Second Gas Supply Route: China The Biggest Consumer Of Russian Gas

Last Friday we mentioned that Russia and China had agreed on many aspects of a second gas pipeline leading to China, the so-called “western route” [Second Massive Gas Deal Between Russia And China Approching: Putin (APEC)].

Today, Russian president Vladimir Putin and Chinese leader Xi Jinping have signed a memorandum of understanding on the gas supplies “western route” to China. The breakthrough agreement opens the way for a contract that would make China the biggest consumer of Russian gas.

It is estimated the “western route”, also referred to as “Altay route”, would supply 30 billion cubic meters (bcm) of gas a year to China.

The new supply line comes in addition to the “eastern” route, which goes through the “Power of Siberia” pipeline. Analysts estimate this route will deliver 38 bcm of gas a year to China. Engineers have already started working on the “eastern route”. The deal was agreed in May this year and is valued at around $400 billion.

“After we have launched supplies via the “western route,” the volume of gas deliveries to China can exceed the current volumes of export to Europe,” Gazprom CEO Aleksey Miller told reporters.

The “western route” route deal is one of the 17 agreements signed during the Sunday Putin-Xi meeting.

It’s also worth noting that Gazprom and CNPC have signed a preliminary agreement for China National Oil and Gas Exploration and Development to take a 10% stake in Russia’s Vancorneft.

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Source: RT, Gazprom, CNPC