Is the Russia-China Gas Deal for Real or Just Fumes?

May 21, 2014 7:32 PM

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After negotiating for 15 years, China and Russia appear to have finally struck a deal to get into the natural gas business together, and build a pipeline linking the two countries. Under the terms of the 30-year pact, China secures the natural gas it needs to fuel its economy (and help clean its air), while Russia gets to diversify away from its testy relationship with Europe. Chances are that Russia won’t ever have to worry about being sanctioned by the Chinese.

As it has been since the late 1990s, the major sticking point in the talks was the price China would pay to buy Russia’s gas. China was always willing to invest some up front cash in return for a cheaper price. Russia was always happy to take that cash, but never wanted to give China too good of a d...

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