China and Russia on Wednesday signed a landmark gas deal ending more than decade-long negotiations, with the agreement for the annual supply of 38 billion cubic metres of natural gas, hailed by the leaders of both countries as underlining their increasingly close ties.
For energy-hungry China, the deal will provide a crucial source of clean energy as the country attempts to sustain growth while reducing its reliance on coal as it battles worsening pollution.
The deal has been valued by some analysts at more than $400 billion, although both sides did not reveal the agreed upon price — the biggest sticking point in tough negotiations that were drawn out over a decade.
The deal was signed as visiting Russian President Vladimir Putin held talks with Chinese President Xi Jinping in Shanghai, where both sides are attending a regional security summit.
Starting 2018, China’s State-run China National Petroleum Corporation (CNPC) will receive 38 billion cubic metres of natural gas annually through a pipeline from Siberia’s gas fields.
Mr. Putin described the deal as the “biggest in history” for his country.
Officials said negotiations carried on until the last minute, concluding only in the early hours of Wednesday, with the Russian leader describing his Chinese interlocutors as “difficult, hard negotiators”.
While both sides did not reveal the agreed upon price, Mr. Putin did say that China had also pledged $ 20 billion investment in infrastructure and gas development in eastern Russia.
That the agreement was finally signed amid increasing tensions between Mr. Putin’s government and Europe led some observers to suggest China had likely emerged with the better deal, with Russia keen to end its reliance on European countries and find a new market for its energy exports.