China throws Russia lifeline with $400 billion natural gas deal

 

In a monumental deal Wednesday, China agreed to buy $400 billion worth of Russian natural gas, significantly expanding the diplomatically isolated Kremlin's economic ties with Asia.

The 30-year deal was reached in the last few hours of Russian President Vladimir Putin's two-day visit to China.

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The deal allows Russia to diversify its natural gas market, which currently flows mainly to Europe. It will give the country an economic boost at a time when sanctions from the U.S. and European Union have placed restrictions on numerous Russian officials and companies amid the Ukraine crisis.

The agreement has given Russia "breathing space," Keun-Wook Paik, a senior research fellow at the Oxford Institute, told the Associated Press.

"Russia, and Putin, can demonstrate it's not completely isolated because of the Ukraine crisis. Russia has demonstrated that they have a very reliable strategic partnership with China," Paik said.

The move by Russia to send its natural gas elsewhere, an energy source that Ukraine and most of Europe depends on, will likely strain tensions even further.

Lawmakers in Congress have urged the administration to act more swiftly in approving natural gas export applications to Ukraine and non-Free Trade Agreement countries.

Efforts to vote on legislation that would fast track such exports has all but stalled in the Senate.

The administration contends the Energy Department is moving at a steady pace in approving exports permits. Still, export facilities in the U.S. would not be online until 2018 at the earliest.

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