RA’s Daily Russia News Blast – May 22, 2014

After a decade of negotiations, a 30-year gas deal has finally been signed between Gazprom and China’s National Petroleum Corporation; but analysts countered President Vladimir Putin’s claims that the deal is a triumph, saying that it will barely allow Gazprom to break even. ‘Our Chinese friends are difficult, hard negotiators,’ Putin said. U.S. Secretary of State John Kerry was careful to emphasise that the deal had been a long time in the making, and was unrelated to tensions in Ukraine. Deliveries are expected to commence in 2018, once the necessary $55 billion worth of pipelines has been constructed. (Russia’s overall investments into the deal will be $55 million, compared to China’s investments of $22 billion.) Gazprom CEO Alexei Miller kept the final figures under his hat, calling the price a ‘corporate secret’; but it is estimated at $350 per 1,000 cubic meters. A Chinese analyst quoted by RIA Novosti says the final price is likely to be closer to one chosen by Russia than China. This piece argues that the deal will hit LNG prices by making the fuel less competitive. Putin says Russian troops are pulling away from the Ukraine border in order to create ‘favourable conditions’ for this weekend’s presidential vote. But he already foresees that it will be difficult to establish relations with Kiev’s new leaders if they come to power during ‘a continuing punitive operation’.