Second gas supply deal signed between Russia and China

Russia and China have signed a second agreement to pipe natural gas from Siberia to China in a deal that could ramp up Russia’s gas exports at a time when tensions between it and Europe are intensifying over the Ukraine crisis.

The deal, signed by presidents Vladimir Putin and Xi Jinping on 9 November ahead of the Asia-Pacific Economic Cooperation (APEC) summit in Beijing, would see Russia’s state-owned firm Gazprom supply China’s state oil company CNPC with 30bn cubic metres of gas per year from western Siberia.

That will be in addition to the 38bcm/y Russia agreed to pipe to China from eastern Siberia in a $400bn agreement signed in May.

The agreement is a breakthrough for Russia, which has long been eager to construct the western line because it has done more to exploit its west Siberian gas reserves compared with the east. Its eastern fields have yet to be developed.

Fighting between pro-Russian separatists and Ukrainian government forces in eastern Ukraine erupted again over the past week, with the Ukraine government accusing Russia of supporting the rebels despite a ceasefire signed in September, in Minsk.

On the same day the latest gas deal was signed, European Union foreign affairs chief Federica Mogherini called on Russia to withdraw "any troops, weapons and equipment under its control from Ukraine, as well as by exercising its influence to ensure that the separatists implement in good faith the obligations assumed in Minsk."

Reuters reports that EU foreign ministers will discuss whether to step up sanctions against Russia when they meet in Brussels next week.

Photograph: Chinese President Xi Jinping, right, and Russian President Vladimir Putin during the APEC Leaders meeting November 10, 2014 in Beijing, one day after signing the western Siberia gas supply agreement (Sasha Mordovets/Getty Images)

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