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    Central Asia
     Apr 8, '14


Crimea crisis may cut China gas price
By Michael Lelyveld

Western pressure on Russia over its annexation of Crimea has raised expectations that it will offer China better terms on a long-delayed gas deal in time for President Vladimir Putin's planned visit in May.

The takeover of the region from Ukraine has heightened the risk that European countries will reduce their reliance on Russia for energy, increasing the importance of exporting its resources to China instead.

The threat of European sanctions is seen as driving Russia's



Gazprom to reach an agreement in its decade-old talks with China National Petroleum Corp (CNPC) for Siberian gas supplies by offering lower prices.

"With Western sanctions, the atmosphere could change quickly in favor of China," said Brian Zimbler, managing partner in the Moscow office of Morgan Lewis, an international law firm, in comments cited by Reuters.

Western nations have made clear that they are considering energy penalties as a next step.

At a press conference in The Hague on March 25, President Barack Obama warned that Washington could join Brussels in imposing sanctions to "include areas potentially like energy, or finance, or arms sales, or trade that exists between Europe and the United States and Russia".

The energy option would strike at the heart of a critical source of Russian income, as well as European interests.

Last year, Europe imported 167.2 billion cubic meters (5.9 trillion cubic feet) of gas from Russia, valued at some US$57 billion, Platts energy news service reported.

Russia supplied one-third of Europe's gas demand and 36% of its crude oil imports, Platts said.

But Europe may now be seeking ways to ease its dependence, giving it a freer hand in responding to Russian expansion moves. More ...

Reprinted with the permission of Radio Free Asia. For original article, see here

Copyright (c) 2014, Radio Free Asia.





 

 

 
 



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