Russia has begun gas supplies to China via the Power of Siberia pipeline, the largest gas project in its history and a symbol of Moscow’s diplomatic pivot towards Beijing at a time of worsening relations with the west, reported the Financial Times.
Dubbed “the contract of the century” by Russian gas group Gazprom, the $55 billion deal with China’s oil and gas major CNPC will eventually allow for 38 billion cubic meters in annual gas supplies to China via the 3,000km pipeline that crosses Siberia to the Chinese border in the south-east.
The pipeline will allow Gazprom to significantly increase gas exports amid declining demand and gas prices in its traditional export markets of Europe and Turkey, which buy on average about 200 billion cubic meters of gas a year. Work on the pipeline began shortly after the US and the EU introduced the first Crimea-linked sanctions against Russia.
The two leaders launched the project via video, Russian president Vladimir Putin from Sochi and China’s president Xi Jinping from Beijing. “This is truly a historic event, not only for the global energy market, but first of all for us, for Russia and China,” Putin said from Sochi. “This step takes Russia-China strategic energy relations to a new quality level and brings us closer to reaching the goal set together with Xi Jinping to raise mutual trade turnover to $200 billion by 2024.”