Russia and China getting friendly again. Nice market for gas so sanctions less of a problem.
Except that knowing they had him over a barrel, the Chinese were able to get the deal of the century and purchase the gas at a fraction over what it costs Russia to produce it. He might have made a deal, but he's not reaping much benefit from it.
http://www.theguardian.com/world/201...gas-deal-china
Alexei Miller, chief executive officer of Gazprom, said the price of gas under the contract, which was reportedly agreed at 4am Beijing time, was a commercial secret, but it is estimated to be over $400bn.
By all indications, the Chinese managed to achieve a lower price than the Russians had wanted, and the deal will mean a loss for Russia, at least for the first several years after operations start in 2018.
According to Vladimir Milov, a former deputy energy minister who is director of the Moscow-based Institute of Energy Policy, the Russian government wanted to open new markets in reaction to increasingly hostile relations with the west over the Ukraine crisis. Whereas the US and the EU have threatened economic sanctions against Russia, China has refused to take a side in the conflict and remains more independent from US pressure than other large economies.
"Putin is ready to diversify gas supplies at any expense because he considers it geopolitically important," Milov said.