"Is the Russia-China Gas Deal for Real - or Just Fumes?"
This title to today's article on www.businessweek.com fits this interesting situation perfectly. It is well known that Russia and China have been working on a natural gas deal for years. In the past, negotiations have been unsuccessful with the linchpin typically being supply price. This time it may be different...MAYBE.
Pictures of Chinese President Xi Jinping and Russian President Vladimir Putin toasting the deal made for great theater. At a minimum, this deal suggests that China may be more willing to work with Russia in the future - the improved relations between the two large neighbors could serve to counterbalance U.S. influence in the global economy. The timing of the deal is coincidentally just a few weeks before a planned summit between the US, Germany and Russia - is the timing too coincidental?
The reported supply price is in line with what Russia charges its European neighbors, especially its most important neighbor there, Germany. The deal is for a long term, possibly as long as 30 years, and would require significant investment (estimated at $75 billion) in pipeline infrastructure.
To read more, please follow this link:
www.businessweek.com/articles/2014-05-21/is-the-russia-china-gas-deal-for-real-or-just-fumes
