Russia And China Sign Gas Pipeline MegaDeal

Russia's Gazprom and China CNPC have signed a historic billion gas contract,t according to various reports.

The price is not yet known. It was previously estimated to be worth $440 billion.

The deal, which has been on the table for over 10 years, will send 38 billion cubic meters of natural gas to China each year starting in 2018 with the potential to expand the annual capacity to 61 billion cubic meters.

China consumed about 170 billion cubic meters of natural gas in 2013 and set a target of up to 420 billion cubic meters a year by 2020.

Europe is Russia's largest energy importer as it bought more than 160 billion cubic meters of natural gas in 2013, but tensions and sanctions over Putin's meddling in Ukraine have Russia looking elsewhere.

Consequently, the deal is huge for the Kremlin since natural gas represents nearly 60% of Russia's total exports.

That being said, the amount of gas is still only about a fifth of what Russia sends to Europe.