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China and Russia sign huge gas deal

China and Russia sign huge gas deal/AFP

China and Russia sign huge gas deal/AFP

SHANGHAI, May 21 – China and Russia agreed a huge gas supply contract in Shanghai on Wednesday, after a decade of talks on the multi billion dollar deal, Chinese state energy giant CNPC said.

The contract signatures were witnessed by Chinese President Xi Jinping and visiting Russian leader Vladimir Putin, CNPC said in a statement.

“This is another major milestone achievement in China Russia energy strategic cooperation,” it said.

Russia has vast energy reserves and China is constantly seeking resources to power the growth of its economy, but the neighbours had been unable to agree a price for years.

No information was immediately available on the terms.

Under the 30 year deal between CNPC and Russia’s Gazprom 38 billion cubic metres could eventually be sent annually from Russia to China, the statement said.

The amount is just over half the 70 billion cubic metres envisaged under a 2009 framework agreement between the two.

Russia has in recent years sought to align itself more closely with China as it seeks to unlock new energy markets in Asia and those efforts are expected to intensify in the face of a fresh confrontation between Moscow and the West over Ukraine.

The signing of the gas contract represents a scoop for Putin after the United States and the European Union slapped sanctions against some of his closest allies following Russia’s takeover of the Crimea peninsula.

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