China / Russia Gas Deal Could Benefit Rest of Asia

Russia’s $400 billion gas deal with China may pave the way for cheaper energy for the rest of Asia and put in question the viability of future gas developments around the world.

By committing to the 30-year accord, Beijing will help finance the development of two vast gas fields in Eastern Siberia. While much of that output will go to China, there will still be plenty of relatively cheap gas left over that Russia plans to pipe to the Pacific coast near Vladivostok and ship as liquefied natural gas to elsewhere in Asia.

That will put downward pressure on energy prices in the region and avoid Russia becoming too reliant on China. Russia made a similar maneuver several years back when it built a crude-oil pipeline to the Pacific with a spur pipeline into China.

WSJ

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