Russia, China Ink Framework Deal On Second Major Gas Supply Deal

[Purveyor]

Source: REUTERS

(Reuters) - Russia and China signed a framework agreement on Sunday for a major gas supply deal, just months after the two states sealed a $400 billion gas deal, part of President Vladimir Putin's strategy to bolster ties with Beijing.

Putin has ordered an eastward shift for the country's economy to avoid isolation following the imposition of Western sanctions over the Ukraine crisis.

Last month Russia and China signed energy, trade and finance agreements - including a currency swap worth 150 billion yuan ($25 billion) intended partly to reduce the influence of the U.S. dollar.

The new gas deal under discussion will see Russia sell an additional 30 billion cubic meters (bcm) of gas to China for 30 years via deposits from West Siberia and delivered through the Altai pipeline.

Read more: http://www.reuters.com/article/2014/11/09/us-china-russia-gas-idUSKCN0IT0GL20141109

[ballyhoo]

1. The rout is just beginning. I wonder how much longer SWIFT

will mean anything? Must be a guiding light...lol

[IMG][/IMG]

[go west young man]

2. Hi ya Bally, Bloomberg has more:

http://www.bloomberg.com/news/2014-11-10/russia-china-add-to-400-billion-gas-deal-with-accord.html

Excerpt:

“China is probably the only country in the world that has both the financial ability and the market capacity to consume Russia’s huge energy exports on a sustainable basis over a long period of time,” Lin said today by phone.

It gives Putin an opportunity to show Europe and the U.S. that his country won’t be isolated over Ukraine, he said.

The two deals could account for almost 17 percent of China’s gas consumption by 2020, Gordon Kwan, a Hong Kong-based analyst at Nomura Holdings Inc., wrote today in an e-mail.

[ballyhoo]

3. BRICS will keep growing as the US continues to

bomb country after country on the world front and cheat its citizens while thinning the herd on the domestic front. It's a opportunity made in heaven for Hillary Clinton. The election went just as both of us thought it would. Good to see you on the board again.

[hack89]

4. Russia is in a tight spot regardless of what they do

tying your economic well being to China is risky - they play a rough brand of capitalism.

[Xithras]

5. Russia has a bit of leverage over China as well.

One of the limiting factors in Chinese exports is shipping, and China has invested untold billions to speed up the process of moving their goods to the rest of the world. Ships are slow, and the less time freight is on a ship, the more money they make.

The Chinese have already inked preliminary deals with Russia to build a new deepwater Black Sea port in Crimea, and the Chinese are now involved with the project to build a massive new road and rail bridge by 2018 to link Crimea to Russia at Kerch. The motivation is simple...freight goes to Crimea by rail (which is MUCH faster than ship traffic) where it gets moved to ships for transport to Africa and the Med. Freight headed to Europe will stay on the rails whenever possible.

China is already pushing their "Modern Silk Road" system to eliminate ship based transport to other Asian nations entirely, and they are already demonstrating an interest in pushing in the same direction for the rest of Eurasia. Last June, the Chinese even revealed that they may be willing to subsidize the construction of a high speed rail system to cross the Bering Strait, which would cut transport time between China and the U.S. to only two days. That gives Russia, which controls most of the stable land between China and the west (nobody is going to build a rail line that borders the Islamic State), a huge amount of leverage over China. And Russia has shown that it's willing to play rough as well.

Because an alliance provides huge benefits to both nations, I think they'll get along just fine.

[hack89]

6. It will certainly make a shit ton more Russian and Chinese billionaires

I suspect the Chinese military is right in the middle of this.