It appears that Russia and China, two longtime geopolitical rivals, have signed a deal that allows the former to provide natural gas to the latter through a planned pipeline over 30 years. The deal is between the state-run organizations OAO Gazprom and China National Petroleum Corp. The true value of the deal has not been disclosed, but has been stated to be about $400 billion by CNPC chairman Zhou Jiping. Gazprom will be investing $55 billion in order to develop new gas fields in Siberia and CNPC will be making $25 billion in advance payments to create the necessary infrastructure for the deal.

In review, this deal seems to be good for both nations. On one hand, Russia is filling a void the European market left, therefore strengthening their economy. On the other hand, China will now have steady, consistent access to natural gas – a cleaner burning source of energy than coal which is heavily used in China. However, haziness over the deal still fills the air. Considering it is easier to export natural gas from Siberia to China rather than to Europe, why did it take a decade of talks for a deal to be struck? Why were there false starts in announcing the deal, and why was it not struck until 4 a.m? The historical relationship between these nations can be to blame for these questions, but it seems that one’s need for a new market for a major export, and the other’s need to move away from coal was enough to push it forward.

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