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

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.