Russia says gas deal to be signed in 'a few hours' as Xi, Putin attend security summit

US$400 billion contract would see Russia supplying China with 38 billion cubic metres of gas over the next 30 years

PUBLISHED : Tuesday, 20 May, 2014, 11:29pm
UPDATED : Wednesday, 21 May, 2014, 6:00pm

Russian Deputy Prime Minister Arkady Dvorkovich said today he hoped a long-awaited gas supply deal with China would be prepared in the "next few hours", ready for signing.

Dvorkovich told an international gas congress in Turkmenistan that he hoped President Vladimir Putin’s trip to Shanghai would end with the signing of the US$400 billion gas contract, which would see Russia supplying China with 38 billion cubic metres of gas over the next 30 years.

"When I left Shanghai yesterday, practically everything was agreed. I hope that my colleagues will complete the work in next few hours and the contract will be ready for signing," he said. 

Dvorkovich was speaking as President Xi Jinping was set to present his vision of foreign policy while hosting a regional forum on security, which Putin was attending.

The Conference on Interaction and Confidence Building Measures in Asia (CICA) is a relatively obscure forum that exists alongside other stronger regional groupings. This comes a year into his term, which has seen Beijing look to assert its interests in continental Asia and the Pacific Ocean.

Through the forum, Beijing is keen to raise the event’s profile and show willingness to work with neighbours, despite recent disputes over maritime territory.

Apart from Putin, the presidents attending include Hassan Rouhani of Iran and Afghanistan’s Hamid Karzai.

“Everyone is a bit surprised it’s being made such a big deal. It seems principally driven by the Chinese, who are very keen for it to be a big event,” said Raffaello Pantucci, research fellow at the Royal United Services Institute for Defence and Security Studies.

“It’s more about China trying to build their regional relationships.”

China has alienated some of its Asian neighbours, even while seeking to counter the US “pivot” to the region. Relations between China and Vietnam have worsened after Beijing’s move earlier this month to send a deep-water oil drilling rig into contested waters in the South China Sea, sparking violent Vietnamese protests in which four Chinese were killed.

Meanwhile, the visiting Russian president is facing a barrage of criticisms from the United States and the European Union for his actions in the Ukraine, and has been under heavy pressure under Western sanctions.

UN Secretary-General Ban Ki-moon, who is in China to attend the CICA meeting, said countries should seek to avoid conflict.

“There [are] many issues: historical legacy issues, territorial issues, maritime disputes,” he said.

“The main agenda of this CICA summit is to promote some preventive actions, avoiding unnecessary conflict."

Xi and Putin have presented a united front  in Shanghai as they face mounting pressure over their handling of conflicts.

The two leaders vowed in a joint declaration to oppose interference in the domestic affairs of other countries and came out against unilateral sanctions - a remark widely seen as targeting the United States.

They also pledged to counter attempts to "falsify the history" of the second world war.

And in a further show of unity, they launched joint naval exercises around the sensitive East China Sea, where China and Japan are involved in a dispute over territorial sovereignty.

Xi launched  the drills at a ceremony in a room lined with officers of both navies in white dress uniform, as Putin looking on. A combined 14 surface ships from both countries are taking part  in the week-long drills,  which are aimed at a “maritime  threat” and include live-fire exercises.

The exercises show “the unshakable determination and will of China and  Russia to together face new threats and challenges to protect regional security  and stability”, Xi said.

Putin said he hoped “the two militaries can strengthen cooperation under  the new situation”. 

It is the third time in as many years that the two countries have held  naval exercises near China’s coast, according to state media.

“The Chinese are much more agitated about what happens on the sea and one  sees support there from Russia,”  Pantucci said.  “The Russians want support on the international stage to grandstand."

Li Lifan, an expert in Russian affairs at the Shanghai Academy of Social Sciences, said: "The suspicions towards the US have pushed China and Russia to move closer, forming a 'sub-alliance' relationship that see both sharing a common stance."

Additional reporting by Reuters and AFP