BEIJING — China signed a long-awaited deal for Russian natural gas Wednesday, giving China a new energy source and Russia a diplomatic boost in the face of sanctions and condemnation for its aggressive actions in Ukraine.
Announced after meetings between Chinese President Xi Jinping and Russian President Vladimir Putin at an Asia security conference, the 30-year deal is worth an estimated $400 billion, according to comments in Russian media by Gazprom chief executive Alexei Miller.
On a symbolic level, the deal also provided China and Russia a chance to reaffirm their
strategic alliance against the United States, their shared global rival.
U.S. Treasury Secretary Jack Lew appealed to China to avoid action that might hurt recent Western sanctions against Russia. But China’s booming economy has brought with it a ravenously growing need for energy, especially clean alternatives given its current pollution struggles and reliance on coal.
The agreement allows Russia to diversify its gas exports just as Europe is trying to reduce its consumption of Russian gas in response to the country’s role in the Ukrainian crisis.
“This is Gazprom’s biggest contract. We don’t have a contract like this with any other company,” Miller said at the meeting in Shanghai, according to
Russia’s Interfax news agency.
In the stroke of a pen, the agreement significantly shifted in Russia’s economic relations with its neighbors, creating a new major export market to the east and reducing reliance on European partners at a time when relations are close to an all-time low. Putin called it a “watershed event.”
He said that the implementation of the deal would start “tomorrow.”
The final price for gas negotiated in the deal was not announced, and it was unclear, given the vague nature of the announcement, whether there were other aspects to the accord that remain to be worked out.
Analysts at IHS Energy — who have tracked the progress of the deal, almost 10 years in the making — said in a written analysis that they believe the final agreed price was “closer to what Russia wanted than what China was initially prepared to pay.”
The long-anticipated agreement met with approval and pride from many Russians, in an atmosphere of rising nationalism and anti-Western rhetoric over the crisis in Ukraine.
One caller to the Ekho Moskvy radio station declared the gas deal “another victory for Putin because he managed to sell gas for European prices,” while another listener suggested the new level in Russian-Chinese cooperation must be a “nightmare for America.”
Putin told journalists in Shanghai on Wednesday that the price of the deal was “pegged to the price of oil and petroleum products,” the Interfax news agency reported.
“This is the largest contract in the history of the gas industry of the former USSR and the Russian Federation,” he told reporters in Shanghai. The infrastructure costs to develop the natural gas fields needed to supply China will top those of putting on the Sochi Olympics – itself an epochal event in Russian state spending.
That the price of the natural gas will be tied to oil prices is also a win for Russia, analysts said, since oil prices are expected to remain high and European customers have been fighting for several years to allow natural gas prices to float freely based on market demands. Gazprom charged European customers on average about $380 per 1,000 cubic meters in 2013.
But the actual price tag on the 30-year contract remained a mystery hours after the signing on Wednesday, raising suspicion for some of the Kremlin’s skeptics that it had dropped the price significantly for China in a desperate maneuver to shore up a steady cash flow for Russian energy giant Gazprom, amid sinking revenue and Western sanctions.
Miller, the Gazprom CEO, had earlier called the price a “commercial secret.” And Putin, without naming an amount, told journalists in Shanghai on Wednesday that the price was “pegged to the price of oil and petroleum products,” the Interfax news agency reported.
Mikhail Krutikhin, an energy and oil analyst at Rusenergy, a Moscow think tank, said the reason for the secrecy was obvious: “There’s something fishy in the contract,” he said, suggesting that Russia got a bad bargain.
Unnamed individuals quoted in Russian media approximated the price at $350 per 1,000 cubic meters of gas, based on earlier projections of a long-term price tag of $400 billion.
But if the actual sale was much less than that, the deal is not as profitable as the Kremlin is making it out to be, Krutikhin said. Gazprom is already losing out to American and European competition; Europe’s gas demands have been stagnant; and the threat of mounting Western sanctions over Ukraine are “making Mr. Putin jittery,” he added.
Russian officials on Wednesday also hinted at a possible “prepayment” totaling $25 billion, raising further questions of whether a prepayment would amount to emergency assistance.
The construction of the pipelines and other infrastructure alone are expected to top $70 billion, Krutikhin said — an amount that a beleaguered Gazprom can’t afford on its own. Russia expects China to pick up part of the bill.
Hauslohner reported from Moscow. Michael Birnbaum also contributed to this story from Kiev.
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May 21, 2014
( May 20, 2014, Johannesburg, Sri Lanka Guardian ) New evidence on the “white flag” surrenders by members of the Liberation Tigers of Tamil Eelam (LTTE) and their families at the end of the civil war requires an independent international investigation, says human rights lawyer Yasmin Sooka, who has served as an expert adviser on Sri Lanka to UN Secretary General Ban Ki-moon.
MAY 20, 2014
As the sun settles on a hot spring day, the streets of Vavuniya, a Tamil-inhabited town ravaged in Sri Lanka’s bloody civil war, are normally deserted. But on a muggy evening last March, the main road resembled an open-air bus terminal. Stretched along a seemingly endless line, buses, filled with the families of Tamils who disappeared during and after the war, sat idle. 
The measures, confirmed by a military spokesman, Brig. Ruwan Wanigasooriya, were part of a crackdown in Tamil-dominated areas intended to prevent open demonstrations of grief for the tens of thousands killed during the country’s 26-year civil war.
Issuing a statement the BASL said; The Standing Committee of the Bar Association of Sri Lanka on Rule of Law views with alarm the brutal killing of a suspect who was under police custody at Ududumbara. This is the most recent of a series of incidents where suspects in police custody regarding the commission of serious criminal offences has been murdered without recourse to the law. In a civilized society state custody is said to be the safest custody but it is regrettable that in our country the rule of law has reached a situation where state custody has become the most dangerous custody. It is unthinkable that our law enforcement authorities and those responsible for administration of justice has up-to-date not even raised this as a serious issue. The government has to be accountable for the loss of life of any person in police custody which amounts to state custody. The government cannot forsake its responsibility for the safety of persons in its custody.
(Lanka-e-News-20.May.2014, 5.30PM) The ruthless Medamulana regime which is currently ruling the country by trampling the oppressed people under its iron heels , had hatched a new deadly conspiracy against its senior SLFP ers whose resistance and resentment are growing rapidly against the regime. This conspiracy is based on the so called ‘LTTE’ created by the Rajapakses themselves.
