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

TODAY: China and Russia sign 30-year gas deal, price kept secret; troops leaving Ukraine border to boost election atmosphere, says Putin; Kremlin-level corruption alleged in construction of luxury estate; St. Petersburg forum begins with few U.S. attendees; Khodorkovsky warns against sanctions; Estonia seeks NATO’s help.

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’.

A Black Sea estate allegedly built for Kremlin elites was partially funded by taxpayer money – accounts linked to its construction are revealed to belong to two of Vladimir Putin’s allies who profited from state contracts relating to a hospital project.  The findings emerged as part of a Reuters investigation into Kremlin profits.  The Kremlin has just earmarked $13.5 billion for infrastructure ‘mega-projects.  Speculation on the health of Russia’s economy remains pessimistic as the 18th annual St. Petersburg International Economic Forum begins today with a diminished list of participants, at least from the U.S., which is seeking to punish Russia for its role in the Ukraine crisis.  Russia promised to respond to the U.S.’s ‘unfounded’ decision to impose Magnitsky sanctions on 12 new officials.  Former Yukos head Mikhail Khodorkovsky has warned against the West imposing further sanctions on Russia that would help the aims of nationalists who want to see the country more isolated. The head of Estonia’s armed forces has called on NATO allies to reconsider their view of Russia.

The children of murdered Russian journalist Anna Politkovskaya are seeking $145,000 in compensation from her killers for moral damage caused by her death.  Amnesty International criticised the conviction of her killers yesterday for leaving ‘too many questions unanswered’.  Moscow has taken the rare step of approving a Strategy 31 rally by The Other Russia.

PHOTO: President of Russia Vladimir Putin and Chinese President Xi Jinping toast with vodka during a signing ceremony on May 21, 2014 in Shanghai, China. Russia and China signed a thirty-year contract for supply of gas. (Photo by Sasha Mordovets/Getty Images)