Russia and China signed a deal for a second gas pipeline linking the two nations yesterday.
Russian President Vladimir Putin met with Chinese President Xi Jinping as part of the APEC Summit in China. They penned a Memorandum to send 38 billion cubic meters of gas from Russia to China for 30 years along the Western Route, reported Chinese news agency Xinhua.
This would see Gazprom and the China National Petroleum Corporation (CNPC) work together on gas supplies along the route.
At the signing, Xi Jinping shared his hope the nations “take good care of the evergreen tree of Chinese-Russian friendship”.
Speaking today at the APEC Summit, Vladimir Putin touched on Asia-Pacific investment in Russian economy doubling to $10 billion since 2009, versus $1 billion in the other direction in 2013. The Russian leader said he wants to “actively correct this imbalance”.
Analysts said the deal would make China the largest export market for Russian gas with the demand potentially up to 68 billion cubic meters per year, overtaking Germany as the largest taker of Russian gas.
Peter Kiernan, Energy Analyst at The Economist Intelligence Unit said: “That is well beyond the 40 Bcm that Russia exported to Germany last year. It would also be equal to half the volume of gas that Russia exported to the EU in 2013.”
He added: “There is still a long way to go before either the eastern or western route of the Sino-Russian pipeline system will be built but it is clear that when it comes to energy exports Russia is increasingly looking east.”