Gazprom (Russia's mega energy corporation) workers attend to work at the construction site of the South Stream, a proposed gas pipeline to transport Russian natural gas through the Black Sea to Bulgaria, Greece, Italy and Austria (December 7, 2012 in Anapa, Russia).
By Scott Neuman
In an agreement reminiscent of the early days of the Cold War, Russia has agreed to supply China with hundreds of billions of dollars worth of natural gas via a pipeline from Siberia pipeline to begin pumping in four years.
NPR's Frank Langfitt reports from Shanghai that in 2018, Russia will begin sending 38 billion cubic meters of natural gas to China each year through the pipeline. Over the life of the 30-year contract, 1 trillion cubic meters would be delivered.
Frank says that Alexey Miller, the chief executive of the Russian company, Gazprom, has said the exact price was a commercial secret, but that the deal is estimated at $400 billion total. Gazprom shares rose 2 percent on the news.
"This is the biggest contract in the history of the gas sector of the former USSR," said Russian President Vladimir Putin, after the agreement was signed in Shanghai between Gazprom and China National Petroleum Corp (CNPC).
"Our Chinese friends are difficult, hard negotiators," he said.
"Both sides were in the end pleased by the compromise reached on price and other terms," Putin said.
The move comes as Russia has been increasingly isolated by Europe and the United States as a result of its annexation of Crimea and continuing unrest in eastern Ukraine. China, too, has been at odds with Washington over confrontations with its maritime neighbors in the South China Sea.
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