On May 21, 2014, Russian president Vladimir Putin and Chinese president Xi Jinping witnessed the signature of The Sino Russian East Gas Cooperation Memorandum between China and Russia and The Sino Russian East Gas Supply Contract between China National Petroleum Corporation (CNPC) and Gazprom in Shanghai. The signature means that negotiation between China and Russia for gas supplying has been finished. 

 

According to the gas contract, from 2018, Russia will supply gas to China through Sino Russian eastern gas pipelines. Gas transmission rate is increased year by year and final gas transmission rate will reach to 38 billion cubic metres per year. The contract is worth 400 billion USD and valid for 30 years.

 

However, official website of CNPC does not announce the price of gas which makes price still be speculated. While without doubt, the contract increases supply channels of China gas. 38 billion cubic metres accounts for about 72% of China total gas import quantum in 2013.

 

The negotiation between China and Russia has been lasted for decade years. The price is the largest obstacle. With bargains, Russia insisted that the price of gas could not be lower than 370 USD per thousand cubic metres. But CNPC said that the price is unacceptable and they could only propose 230 USD per thousand cubic metres. 

 

Currently, the cost of Russian gas is about 100 USD per thousand cubic metres. The price supplying to home country is about 150 USD per thousand cubic metres, supplying to Belarus 200 USD per thousand cubic metres while close to 400 USD per thousand cubic metres to Europe. 

 

What is more, on May 21, John Forbes Kerry, secretary of state said that the signature of gas contract between China and Russia was irrelevant with the situation in Ukraine. China cooperated with Russia for several years and that could not affect Ukraine.