Russia and China hopeful over gas deal

The Chinese and Russian presidents are not averse to signing economic agreements of mutual benefit, as they did on Thursday at an investment forum in St Petersburg.

But the big one has so far eluded them. For five years they have been trying to thrash out a deal for Russia to supply gas to China for the next 30 years. It could be worth up to a trillion dollars.

Beijing’s booming economy needs gas to sustain itself; Moscow needs to spread its exports outside Europe.

The problem, sources close to the talks say, is the price: the Chinese want a fixed deal, the Russians want a flexible approach, linking the price of gas to the oil market in line with its other contracts.

Despite the stumbling block the two sides say the talks will go ahead at the highest level, and they’re optimistic that an agreement will eventually be reached. “There should be no rush” said China’s President Hu Jintao.

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