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China to become Russia's biggest gas consumer if western route developed

Published time: May 24, 2014 13:27
Edited time: May 24, 2014 14:15
RIA Novosti / Michail Klimentyev

RIA Novosti / Michail Klimentyev

China could replace Germany as Russia’s biggest gas consumer, if Moscow and Beijing agree to add a route from Russia’s Western Siberia to the one already agreed under a $400 billion contract, President Putin said at a meeting with media in St. Petersburg.

Germany now consumes 40 billion cubic meters of Russian gas annually, and China will start buying even more if the western route is agreed on, Putin said.

“The next step [in Russia-China gas cooperation] is a possibility to make a similar deal on a so-called western route,” President said commenting on a Russia-China megadeal signed Wednesday in Shanghai.

The president added the route connecting Russia’s western Siberia and China could be developed even faster than the eastern.

Though so far there are no concrete agreements on the western route, Putin said it would also be cheaper than the eastern one.

The key issue is connected with pricing and the second project should be easier in this respect as the main mechanism would be already tested by then, he explained.

Aleksey Miller, head of Russia’s gas giant Gazprom has insisted that the gas price in a $400 billion deal was a “commercial secret,” while Aleksandr Medvedev, CEO of Gazprom’s export arm, said it would be well above $350 per 1,000 cubic meters.

The eastern route connects Russia’s Kovykta and Chaynda fields with China, where recoverable resources are estimated at about 3 trillion cubic metres. Putin, however, says they are underestimated and have even more, enough to last for the next 50 years.

Comments (74)

 

Terry Ross 26.05.2014 15:48

Michael Dunham 26.05.2014 15:19

The fact of the matter they need to borrow money to fund sections of the Russian budget.

  


No this is not a fact. As I have pointed out there has not only been enough funding from oil and gas for the budget, but enough left to pay down government debt and add to the Naional Wealth Fund. (which is now $87 bn) A parallel Stabilisation fund (from surplus oil and gas revenue) of $88 bn is used to prop up budget due to any downward price movements in oil or gas.

 

Terry Ross 26.05.2014 15:41

Michael Dunham 26.05.2014 15:15



Th ere's more than one way for countries to generate revenue without relying on oil and gas and without overburdening the population through taxation.

  

Really? It appears that is not the case in US where just about every dollar comes from taxation (topped up with borrowing when taxation is insufficient)
US budget revenue 2010:
40% Payroll tax
42% Individual income tax
9% Corporate income tax
3% Excise taxes
6% Other

 

Terry Ross 26.05.2014 15:35

Michael Dunham 26.05.2014 15:11



Rus sians pay 43% income tax not the low rate of taxation you claim and they are not see any real benefit from the revenues generated by oil and gas.

  


Why do you bother to come out with such false stats without ever quoting sources.

Ru ssia has a uniform rate of tax on the income of individuals. As of 2013 tax in Russia is payable at the rate of 13% for an individual on most income. (non-residents 30%). Russian residents pay 9% on dividend income. (Deduction at source).
Non-res idents pay 15% on dividend income.
Source: Worlwide-taxDotcom

13% - get it!!

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