Gazprom signs China gas supply deal as Putin meets Xi

Russia's state-controlled Gazprom said it has signed a deal with China's state-owned CNPC to increase gas supplies to China, one of a number of agreements expected to be announced today to coincide with a meeting in Beijing between President Vladimir Putin and his Chinese counterpart Xi Jinping.

The deal, described as a long-term sales and purchase agreement, covers supplies of 10bn m³/yr through the "far east route", Gazprom said. The gas is likely to be shipped to China from far east Russia's Sakhalin through Gazprom's Sakhalin-Khabarovsk-Vladivostok pipeline, although no timeframe has been given. Gazprom plans to extend the line and capacity to 30bn m³/yr from 8bn m³/yr now.

The firm plans to ship 38bn m³/yr of gas to China from east Siberia through the Power of Siberia 1 pipeline from 2025, up from 14bn m³/yr planned this year, so today's deal will take total pipeline gas supplies to China to 48bn m³/yr.

The deal is a coup for Gazprom and Russia, coming against a background of heightened tensions with the US and Europe over the Ukraine crisis and calls from senior EU officials for member states to reduce their dependence on Russian energy supplies.