- POSTED: 23 May 2014 18:00
- UPDATED: 24 May 2014 00:04
The US$400 billion gas deal between Russia and China is expected to be just the first of many more partnerships to come, as the two powers have decided to put business above politics.
SHANGHAI: The US$400 billion gas deal between Russia and China is expected to be just the first of many more partnerships to come, as the two powers have decided to put business above politics.
The gas deal on Wednesday was a historic partnership between the world's largest gas exporter and the world's biggest energy consumer, under which Russia will feed China's natural gas needs for 30 years.
The agreement lets Russia rebalance its energy market from the West to the East, and secures fuel for China's insatiable demand.
David Gosset, director of Academia Sinica Europaea at China Europe International Business School, said: "What do you have in Siberia? Yes, you have oil, you have gas. But you also have a lot of water, and China is in need of water, especially northern China, as you have massive infrastructure projects there.
“More (partnerships) will come between these two countries, and not because Moscow and Beijing want to be anti-Western, but just simply because they have objective needs and they're neighbours."
The two countries have already set a bilateral trade target of US$200 billion by 2020.
China says it will not interfere in Russian politics despite international pressure.
Cheng Xiaohe, from Renmin University, said: "China and Russia will continue to strengthen their strategic cooperative partnership, and they will try hard to transform their strengthened political cooperation into tangible material benefits.”
While actual prices agreed upon in the gas deal has not been made public, analysts believe it may impact on gas prices when Russia starts supplying gas to Japan and South Korea in the future.
The gas deal may even put pressure on LNG prices from the Middle East and Australia, which is the result of what happens when two of the world's biggest gas players get together.