Russia and China have signed the largest contract in the history of Gazprom

Today in Shanghai, Gazprom CEO Alexey Miller and China National Petroleum Corporation (CNPC) President Zhou Jiping signed a contract for the supply of Russian pipeline gas to China via the eastern route. The document was signed in the presence of Russian President Vladimir Putin and PRC President Xi Jinping.

The 30-year contract provides for exports of 38 billion cubic metres of Russian gas to China per year. It was signed on mutually beneficial terms and includes key parameters such as a pricing formula pegged to the oil basket and a “take or pay” clause.

“Russia and China have signed the largest gas supply contract in the history of the Soviet Union and Gazprom: more than 1 trillion cubic metres over the term of the agreement. We have opened an entirely new market with huge potential for Russian gas.

“The supply of Russian pipeline gas to China is the largest investment project of global importance. In Russia alone, investment in gas production and transmission facilities will amount to $55 billion. A large-scale gas infrastructure will be built in the eastern part of Russia, leading to the economic development of the region. Entire sectors of the Russian economy will be given a boost: metals, pipe production and machine building.

“Today we have opened the first page of a thick volume of the history of Russian–Chinese gas cooperation, in which many more important chapters will be written,” said Alexey Miller.