New Eastern Europe: Misinterpreted Gas Deal

Facts about the Chinese-Russian “gas deal of the century” that have come to light recently show just how weak the position of Gazprom really is when it comes to negotiations with Beijing. Before the gas flows through the “Power of Siberia” pipeline, Russia must nervously wait a few years as the struggle for its full implementation will take time.

Although the “historic” agreement is arguably unprofitable to the Russian economy, Deputy Chairman of Gazprom, Alexander Medvedev, sees it in a different way. He has said that the deal of the century deserves to be included in the Guinness Book of World Records as the largest gas deal in history. But what does it really look like?

The gas delivery pipeline, called the “Power of Siberia”, is expected to launch in 2019. The total cost of the pipeline is expected to be around 55 billion US dollars. The value of the contract with China is equally impressive: $400 billion. According to the agreement, Gazprom will receive from the China National Petroleum Corporation (CNPC) $25 billion as a prepayment for its gas supplies. This will allow the Russian energy giant to set up a significant part of the pipeline.
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