Russia's state-controlled Gazprom signed a long-awaited megadeal to supply gas to China this week, which could ease the impact of Western sanctions on the country.
This deal will see Gazpeom, the world's largest extractor of natural gas, supply 38 billion cubic metres of gas to China annually for 30 years, according to Reuters, under a contract that is valued in excess of $400 billion.
The deal was signed with China National Petroleum Corp, which is also state-controlled. Reuters reported that the Russian President Vladimir Putin and his Chinese counterpart Xi Jinping celebrated as they witnessed the deal being signed.
The agreement followed a gas summit in China, where Putin was one of the most high-profile guests. China is a highly desirable market for energy suppliers to tap, according to Graham-Wood, founding partner at energy consultancy HydroCarbon Capital, the deal made sense for both China and Gazprom because China's energy demand is rapidly rising, although it remains significantly below the more saturated US market.
Gazprom said it would publish further details of the deal shortly.