China committed to Russian gas project

(Reuters, Moscow, 30 April 2014) Chinese investors are committed to financing part of Novatek's $27 billion Russian gas project, ensuring it has sufficient backing despite losing U.S. support because of sanctions, the company said on Wednesday. The U.S. export credit agency Ex-Im pulled out in March. Russian borrowing has languished this year on lenders' concern over becoming caught up in U.S. and EU sanctions imposed on Russian individuals in retaliation for Moscow's annexation of Crimea and support for separatists in eastern Ukraine. Reports indicate that another deal, worth $1 trillion and 10 years in the making, would be inked during Russian President Vladimir Putin's May visit to Beijing. In it, the giant, state-controlled Russian energy giant Gazprom would agree to supply the giant state-controlled China National Petroleum Corporation (CNPC) with 3.75 billion cubic feet of liquefied natural gas a day for no less than 30 years, starting in 2018. That’s the equivalent of a quarter of Russia’s massive gas exports to all of Europe. China’s current daily gas demand is around 16 billion cubic feet a day, and imports account for 31.6% of total consumption. Some predict this could lead to a major shift in US global energy influence and even the role of the US dollar in world trade. It is obvious that export credit and ECAs will play a major role in these investments.