So. Russia and China just signed a major natural-gas deal.

posted at 8:01 pm on May 22, 2014 by Erika Johnsen

Just as Europe has lately been reevaluating its options for energy suppliers in the event of a Russian-Euro falling out, Russia has for some time been reevaluating its options for energy buyers. Natural gas accounts for almost 60 percent of Russia’s total exports, and Russia couldn’t very well yank any supplies from Europe without sustaining a major blow to their revenue stream, and there is security in diversity…

ukraine gas map

…which is one of the reasons why the Russians have been putting their energy (literally and figuratively) into making a deal with their more — ahem — philosophically amenable neighbors to the south. The deal has been in the works for going on a decade now, but you can bet that that little incident with Crimea lit a fire under the whole thing. Putin very much wants to let the world know that he has other options if the West keeps up with sanctions, via the Telegraph:

Russia’s President Vladimir Putin has pulled off a major political coup by securing a landmark $400bn (£236bn) gas agreement with China, a move that will come as a blow to US efforts to isolate the Kremlin.

Few details were available for the deal – one of the world’s biggest energy pacts – but state-owned China National Petroleum Corp said that it had signed a 30-year agreement to buy up to 38bn cubic metres a year of gas from 2018.

The deal is a coup for Mr Putin as he seeks to open up new markets for Russian gas as the US prepares to begin exporting to Europe, currently Russia’s main market. It also sees Russia move closer to Beijing at a time when the Kremlin is a loggerheads with the US over the political situation in Eastern Ukraine following its annexation of Crimea. …

A new pipeline linking Siberia’s gas fields to China’s main coastal cities will be built as part of the agreement and Russia plans to invest $55bn in exploration and pipeline construction. …

In China, annual demand for gas is expected to reach 420bn cubic metres by the end of the decade and sustain a rate of 14.3pc growth through to 2030. Under Beijing’s natural gas policy unveiled in 2012 gas will increasingly be used to run cars, trucks, trains and ships.

It isn’t enough to displace all of the cash they get from the European market (and Russia still has serious work to do before it can replicate the production boom in the United States that has caused the Russians so much grief), but it’s a good deal for both of these newfound Eastern energy partners: Russia gets a major new market for its main export to better support its energy-dependent economy, while China gets a lot more nicely-priced and cleaner-than-coal natural gas to combat their insane pollution problems — and hey, why should China bother getting all judgmental about a little ol’ thing like annexing one of your neighbors?


Related Posts:

Breaking on Hot Air

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

Trackbacks/Pings

Trackback URL

Comments

Barry’s sanctions are the best thing to ever happen to Putin!

PaddyORyan on May 22, 2014 at 8:03 PM

Barry the mom jeans girls bicycle riding buffoon played checkers with Putin, while Putin put his punk commie a$$ in check

oscarwilde on May 22, 2014 at 8:09 PM

This is more of that ‘smart power’ we keep hearing about.

Russia mulling deal to build up to 8 nuclear reactors for Iran

sharrukin on May 22, 2014 at 8:10 PM

The end.

ThePrez on May 22, 2014 at 8:15 PM

This is more of that ‘smart power’ we keep hearing about.

Russia mulling deal to build up to 8 nuclear reactors for Iran

sharrukin on May 22, 2014 at 8:10 PM

America had an opportunity to turn an old Cold War foe, into a friend, The Obamanation Administration chose foolishly to turn them back into an enemy.

oscarwilde on May 22, 2014 at 8:15 PM

How much was Biden’s commission in all of this ?
His son now lobbies for who :O
http://www.foxnews.com/politics/2014/05/13/vp-biden-son-joins-ukraine-gas-company-board/

burrata on May 22, 2014 at 8:16 PM

America had an opportunity to turn an old Cold War foe, into a friend, The Obamanation Administration chose foolishly to turn them back into an enemy.

oscarwilde on May 22, 2014 at 8:15 PM

Clinton and Bush didn’t help, but yeah, the lions share of the damage was done was by Obama.

India also looks to be drifting into that alliance.

Russia, India Planning $30 Billion Oil Pipeline Through Xinjiang

sharrukin on May 22, 2014 at 8:18 PM

Russia China gas deal.

Always read the fine print. China got a deal. Russia not so much.

http://time.com/109161/china-russia-gas-deal/

coolrepublica on May 22, 2014 at 8:19 PM

I see coolrepublica is here trying to impress with her intelligence. Surprised she didn’t link to Mother Jones or Daily Kos.

Judge_Dredd on May 22, 2014 at 8:23 PM

With production at Sakhalin Island on their East Coast it’s curious as to why Russia didn’t do this earlier.

Kermit on May 22, 2014 at 8:25 PM

Russia China gas deal.

Always read the fine print. China got a deal. Russia not so much.

http://time.com/109161/china-russia-gas-deal/

coolrepublica on May 22, 2014 at 8:19 PM

It means the loss of the European pipeline routes becomes a mild inconvenience at best for Russia. Russia then has little to lose and can interrupt the flow at will with only a slight loss of revenue at worst.

sharrukin on May 22, 2014 at 8:25 PM

communists having dinner.

weedisgood on May 22, 2014 at 8:27 PM

Wow, that reset button just keeps producing success after success.

Bitter Clinger on May 22, 2014 at 8:27 PM

With production at Sakhalin Island on their East Coast it’s curious as to why Russia didn’t do this earlier.

Kermit on May 22, 2014 at 8:25 PM

They wanted a higher price I would imagine, but the EU/US threats and the possibility of the Ukraine severing the pipelines through that country meant they had to act quickly. They have also been negotiating with Japan and South Korea for pipelines from Sakhalin.

sharrukin on May 22, 2014 at 8:27 PM

I see coolrepublica is here trying to impress with her intelligence. Surprised she didn’t link to Mother Jones or Daily Kos.

Judge_Dredd on May 22, 2014 at 8:23 PM

Darlin’, I never need to “impress” with my intelligence. It just shines bright like a diamond. :-)

coolrepublica on May 22, 2014 at 8:29 PM

Tonight, this will be spun as a terrific victory for Obama and America (since he’s not really an American, eh?) by the MSM.

Or, they will totally ignore it.

Winning!

Tard on May 22, 2014 at 8:30 PM

The thing about tyrannical governments being friendly with one another, it’s all fun and games until one of them needs to be take the lead, then all bets are off.

Bishop on May 22, 2014 at 8:31 PM

Anyhoo, the demorats already have a plan: They’re going to export solar energy to Europe and cut Putin off at the knees on that front.

Bishop on May 22, 2014 at 8:32 PM

Darlin’, I never need to “impress” with my intelligence. It just shines bright like a diamond zircon. :-)

coolrepublica on May 22, 2014 at 8:29 PM

Judge_Dredd on May 22, 2014 at 8:33 PM

The thing about tyrannical governments being friendly with one another, it’s all fun and games until one of them needs to be take the lead, then all bets are off.

Bishop on May 22, 2014 at 8:31 PM

Yeah, it will be interesting to see how this plays out in the end. The old Soviets and the Chi-Coms hated each other.

Bitter Clinger on May 22, 2014 at 8:36 PM

The old Soviets and the Chi-Coms hated each other.

Bitter Clinger on May 22, 2014 at 8:36 PM

but they hate America even more !

burrata on May 22, 2014 at 8:38 PM

Judge_Dredd on May 22, 2014 at 8:33 PM

Still shinning baby. Still shinning. Lol

coolrepublica on May 22, 2014 at 8:40 PM

Shinning? You do sit ups too?

Bishop on May 22, 2014 at 8:43 PM

Judge_Dredd on May 22, 2014 at 8:23 PM

 
Darlin’, I never need to “impress” with my intelligence. It just shines bright like a diamond. :-)
 
coolrepublica on May 22, 2014 at 8:29 PM

 

Still shinning baby. Still shinning. Lol
 
coolrepublica on May 22, 2014 at 8:40 PM

 
This place can be a lot of fun sometimes.

rogerb on May 22, 2014 at 8:46 PM

Darlin’, I never need to “impress” with my intelligence. It just shines bright like a diamond. :-)

coolrepublica on May 22, 2014 at 8:29 PM

cubic zirconia at best. shiny on the outside and absolutely worthless.

dmacleo on May 22, 2014 at 8:50 PM

Putin — “So, you Euro-weenies want to impose sanctions on us? And you still expect us to sell you natural gas? Because we have no other options? Bwahahahaha.”

Putin, later to Dmitry Medvedev — “Dimitry, another vodka. And one for yourself, too. Let us toast those Western European idiots who have forgotten how free markets work. Back in the day we learned that lesson well in the KGB. And the fools still think socialism can work, too. Even the Chicoms now understand free markets better than those backward Western European socialists. These are good times, Dimitri, good times.”

farsighted on May 22, 2014 at 8:50 PM

cubic zirconia at best. shiny on the outside and absolutely worthless.

dmacleo on May 22, 2014 at 8:50 PM

Great minds and all that. :)

Judge_Dredd on May 22, 2014 at 9:04 PM

cubic zirconia at best. shiny on the outside and absolutely worthless.

dmacleo on May 22, 2014 at 8:50 PM

Zircon is NOT cubic zirconia.

Hey judge dredd, did I just “impress” you there with my knowledge of minerals. Did I? Lol

coolrepublica on May 22, 2014 at 9:07 PM

….Smart Power!

KOOLAID2 on May 22, 2014 at 9:08 PM

Troll — “Pay attention to me! Pay attention to ME! Pay attention to ME, ME, ME!”

farsighted on May 22, 2014 at 9:14 PM

Zircon is NOT cubic zirconia.

Hey judge dredd, did I just “impress” you there with my knowledge of minerals. Did I? Lol

coolrepublica on May 22, 2014 at 9:07 PM

He’s simply from a different era than I. Zirconia is simply an oxide, as was the original ‘zircon’ colloquialism back in the 60s. But it did take you 17 minutes to google it apparently.

Judge_Dredd on May 22, 2014 at 9:18 PM

Shinning? That is musculoskeletal furniture locating in the dark you mouthbreathing Jethro’s.

Murphy9 on May 22, 2014 at 9:23 PM

What’s the over-under on how many sock puppets libfreeOffOfOthers has now after two open registrations?

farsighted on May 22, 2014 at 9:23 PM

What’s the over-under on how many sock puppets libfreeOffOfOthers has now after two open registrations?

farsighted on May 22, 2014 at 9:23 PM

He’s far too angry an individual to engage in such fun-loving tomfoolery as some of the socks that had me LMAO in recent times.

Judge_Dredd on May 22, 2014 at 9:29 PM

So Obama tries to play geo-policital world leader in Ukraine, and somehow manages to lose the Cold War. Nice.

higgins1991 on May 22, 2014 at 9:30 PM

He’s simply from a different era than I. Zirconia is simply an oxide, as was the original ‘zircon’ colloquialism back in the 60s. But it did take you 17 minutes to google it apparently.

Judge_Dredd on May 22, 2014 at 9:18 PM

So let me get this straight. You knew zircon is not cubic zirconia and yet you agreed with him. Interesting.

But you are right I did google zircon, because I am a young pretty thing, and in the 60′s I was not even a glimmer in my my mother’s eye.

As yoga never said.

It is better to google and be right, then not google and call zircon cubic zirconia, lol

coolrepublica on May 22, 2014 at 9:30 PM

http://en.wikipedia.org/wiki/Cubic_zirconia

Cubic zirconia (CZ) is the cubic crystalline form of zirconium dioxide (ZrO2). The synthesized material is hard, optically flawless and usually colorless, but may be made in a variety of different colors. It should not be confused with zircon, which is a zirconium silicate (ZrSiO4). It is sometimes erroneously called “cubic zirconium”.

yeah you impressed me…

dmacleo on May 22, 2014 at 9:32 PM

coolrepublica on May 22, 2014 at 9:30 PM

I agreed with the ‘shinny but worthless’ sentiment. Such is the gilled age we live in… :P

Judge_Dredd on May 22, 2014 at 9:33 PM

He’s far too angry an individual to engage in such fun-loving tomfoolery as some of the socks that had me LMAO in recent times.

Judge_Dredd on May 22, 2014 at 9:29 PM

True. Like all Marxists, that one has no sense of humor.

Imagine what parties with Lenin, Stalin, and Mao must have been like… when they were holding court and telling “jokes”… “Did you hear the one about the starving Kulak? … A capitalist, a right-wing running dog, and an imperialist pig walk into the re-education camp bar…”

Or in this case… “How many racists, homophobes, and Tea Baggers does it take to..?”

farsighted on May 22, 2014 at 9:41 PM

I agreed with the ‘shinny but worthless’ sentiment. Such is the gilled age we live in… :P

Judge_Dredd on May 22, 2014 at 9:33 PM

But judge dredd you being wise should know that diamond is no more valuable than zircon. It’s value is based entirely on the cartel power of de beers and marketing. I did not care for the value of diamond, just it’s brightness.

My intelligence shines like a diamond, but has the value of emeralds. ;-)

coolrepublica on May 22, 2014 at 9:46 PM

Is it just me or did anybody else’s IQ just drop a few points?

Judge_Dredd on May 22, 2014 at 9:50 PM

Is it just me or did anybody else’s IQ just drop a few points?

Judge_Dredd on May 22, 2014 at 9:50 PM

Just you! Are you feeling ok? It could be environmental. Is anything unusual happened in your house in the last hour? Do you have animals that could have brought something in? You better go out and have it checked out quick. Good luck ok. And keep us up to date.

Bye!

coolrepublica on May 22, 2014 at 9:56 PM

Is it just me or did anybody else’s IQ just drop a few points?

Judge_Dredd on May 22, 2014 at 9:50 PM

I find that can happen when trying to explain the obvious to the oblivious.

farsighted on May 22, 2014 at 9:58 PM

Russia couldn’t very well yank any supplies from Europe without sustaining a major blow to their revenue stream


WHY
would Russia want to cut off Europe, Erika?

Wouldn’t they be better off if they reduce supply and raise prices?

This would allow them to punish Europe while not hurting themselves.

And they now have a new market for what they withhold from Europe.

Russia gets a major new market for its main export to better support its energy-dependent economy, while China gets a lot more nicely-priced and cleaner-than-coal natural gas to combat their insane pollution problems

.
You missed one REALLY important part under the cover of “details are not available”.

Indications from both Russia and China are the new deal includes direct currency exchange allowing them to bypass the USD’s reserve currency status.

Many of America’s trading partners already have direct currency exchange agreements negotiated with China.

What happens to the USD’s strength whjile the “reserve currency” rug is pulled out from underneath it?

PolAgnostic on May 22, 2014 at 10:01 PM

Bye!

coolrepublica on May 22, 2014 at 9:56 PM

Don’t leave, coolrepublica. I promise to quit poking fun at you.
(I feel like I just stepped on a bunny rabbit)

Judge_Dredd on May 22, 2014 at 10:04 PM

Indications from both Russia and China are the new deal includes direct currency exchange allowing them to bypass the USD’s reserve currency status.

Many of America’s trading partners already have direct currency exchange agreements negotiated with China.

What happens to the USD’s strength whjile the “reserve currency” rug is pulled out from underneath it?

PolAgnostic on May 22, 2014 at 10:01 PM

And so it begins.

The rest of the world does not like what we are getting away with because we can make as many dollars as we like out of thin air.

And they are starting to do something about it.

farsighted on May 22, 2014 at 10:08 PM

And so it begins.

The rest of the world does not like what we are getting away with because we can make as many dollars as we like out of thin air.

And they are starting to do something about it.

farsighted on May 22, 2014 at 10:08 PM


Personally
… I think we are closer to the ending than the beginning.

The Fed used QE to “offshore” inflation and trading partners like China and Europe have been made less competitive by appreciation of their currencies.

And while the taper of QE continues, most people forget the Fed has NO plan to taper their balance sheet back down by $ 4 trillion.

They plan to just keep “turning it over” into new Treasurys and mortgages ad infinitum.

If 5 years of screwing over your trading partners is good, then 10 years MUST be better, right?

But if the bulk of your trading partners abandon the USSD as the reserve currency … the Federal Reserve gets to write off a multi-trillion dollar loss … to the U.S. Treasury.

PolAgnostic on May 22, 2014 at 10:56 PM

and Russia still has serious work to do before it can replicate the production boom in the United States that has caused the Russians so much grief

That’s confirmation that you know nothing of international energy markets. Seriously are you getting paid for this crap?

lexhamfox on May 22, 2014 at 11:49 PM

So. Russia and China just signed a major natural-gas deal.

Slava!

Dr. ZhivBlago on May 23, 2014 at 1:02 AM

If anyone has to worry about China it’s Russia. All those natural resources, and women, within ground reach of China… that may be to tempting to pass up.

Mfarmer on May 23, 2014 at 1:33 AM

Putin will just spend all the money on more vodka for Russians.

albill on May 23, 2014 at 6:27 AM

I said months ago that Barry’s sanctions against Russia were a joke as long as China and India were willing to do business. If some guy at home can see this so clearly, why did our our “betters” and our media not immediately jump all over the obvious?

We are such a frivolous nation.

Count Mahdrof on May 23, 2014 at 7:46 AM

Putin had to deal with China on terms that are great for China and only OK for Russia because America is putting all the pressure on post-Communist Russia and not on the much more dangerous foe, Communist China.

That’s diplomatic malpractice by the American State Department. They have essentially forced a Chinese-Russian alliance that will undermine the American dollar.

Hot Air, which is shilling hard for Cold War II, spins this as being all about Russia being evil, and thus the natural ally of China.

That’s baloney. China and Russia are naturally at odds. Nixon figured this out long ago, and used it wisely. What Obama is doing is the opposite of wise.

David Blue on May 23, 2014 at 8:13 AM

Hot Air, which is shilling hard for Cold War II,

David Blue on May 23, 2014 at 8:13 AM

Hello, libtard troll!

Try “correctly predicting” CW2 thanks to Obummer’s tomfoolery and weakness.

LawfulGood on May 23, 2014 at 9:40 AM

Hello, libtard troll!

LawfulGood on May 23, 2014 at 9:40 AM

Hello gay guy.

To the extent that this is about a liberal / conservative conflict, the sides are still as they lined up at Sochi: “we” are supposedly all for LGBT rights, multiculturalism and Hollywood values. Russians, those evil villains, aren’t like “us”; they support Orthodox Christianity and patriotism. BOO! HISS!

On the basis of that assumption of “moral clarity”, “we” are supposed to be all for the coup and the fascist junta in Ukraine; and against the Russian-speaking Ukrainians who lost their democracy and their rights, and are standing up for their independence from a government that doesn’t represent them.

No sale.

And on and on the State Department and the mass media keeps ignoring that this is all about an un-elected junta knocking over a democratically elected government, and that the Russians were doing nothing before that happened, and that is what started and drives everything.

No sale.

What did people think that Putin was going to do about that? Just take it, and keep Ukraine on welfare while the foreign-sponsored fascist junta took control of Crimea and Sevastopol and turned the Black Sea into a NATO lake? That’s unreasonable. Anybody who can understand the point of the Monroe Doctrine should be able to see why the Russians would not buy that.

Am I supposed to respect Hunter Biden and John Kerry’s crony diving in for their corrupt share of the profits of this coup? Why would I respect that?

Is it supposed to be cool the junta is calling dissidents in the East of Ukraine “terrorists” and attacking them with violence? I don’t think so.

Maybe you’re so keen on the gay indoctrination of children and the other corrupt garbage Putin’s Russia is rejecting that you’re all for fascism. After all, don’t elections just get in the way? That’s how the hard left in America thinks too, though they prefer to circumvent democracy with activist judges rather than death squads (so far).

I don’t accept this. The Obama State Department line is a bunch of lies, and Hot Air should not be supporting it. The destruction of democratic government, exploitative corruption Hunter Biden style, and culture war against people who don’t want their nation dragged down to the level of Pussy Riot, FEMEN and enforced gayness is not in line with conservative values as I understand them.

David Blue on May 23, 2014 at 1:07 PM

LawfulGood on May 23, 2014 at 9:40 AM

David Blue on May 23, 2014 at 1:07 PM


Blurred lines

PolAgnostic on May 23, 2014 at 9:27 PM

No, it’s not a good deal for Russia. Maybe you should read up on the subject before offering your “analysis”. Russia exempted this project from taxes to make it profitable. And yet, there are still serious doubts that Russia will even break even.

Here’s the thing. It’s good when you can diversify your markets by increasing the number of buyers. It’s something totally different when you’re in trouble in Europe and you must find a replacement. The Chinese ain’t stupid. They know Putin has nowhere else to go. They have used this fact to their advantage. Rerouting gas isn’t like rerouting pizza. You need to develop new fields and build new pipes. It may be worth it long-term but it’s likely going to be a disaster short-term.

PBH on May 23, 2014 at 10:55 PM