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International Herald Leader: Russia’s Dilemma – Supplying Natural Gas to China

The International Herald Leader reported that Russia is facing a dilemma on supplying natural gas to China. On October 13, 2009. China and Russia signed a framework agreement for the building of two natural gas pipelines from Russia’s gas fields in the Far East to China. However, for the two countires to reach an agreeable price will be a challenge. China suggested $100-120 USD per thousand cubic meters, but Russia’s lowest price is $250-270 USD. Russia is afraid that asking for too high a price may drive China to Kazakhstan and Turkmenistan. Russia is also concerned regarding whether it will depend too heavily on China financially and will become just a “natural resource provider” to China.

Source: International Herald Leader, October 15, 2009