Gazprom, Russia’s largest gas provider, is currently negotiating a deal with China to supply the country with 38 billion cubic meters of natural gas. If successful, the deal will initiate in 2018 and last for a period of 30 years.
Gazprom’s profit margin in Europe and its home country is on a downward trend. It is not expected to get better in these markets as demand for oil and gas are expected to decrease as as a result of energy efficiency. Therefore, successful negotiations with China could resurrect hope and stability for the company. The company’s stock could also double within three years if the deal is successful.
Russia is on a mission to increase energy exports to Asia. This is as it is predicted that the continent will consume more than half of the global energy by 2040. Just last year, Rofnet, Russia’s oil giant, sealed a deal with a Chinese petroleum company to supply the Chinese market with 26 billion barrels of oil over the course of 25 years. Many are predicting that the Gazprom deal will be finalized during President Putin’s visit to China in May.