Putin Seeks Chinese Agreement as Oil Slump Sours Second Gas Deal

24-Aug-2015

Russia’s energy pivot toward Asia faces its sternest test early next month when President Vladimir Putin visits Beijing amid slumping oil prices and concerns over China’s economic slowdown.

While Gazprom PJSC said on Aug. 18 that talks over a second natural gas supply contract with China are “showing good dynamics,” the Beijing government damped Russian hopes that a deal will be signed on Putin’s two-day trip starting Sept. 2.
China and Russia aren’t targeting a deal during the visit as the more than 50 percent slump in crude over the past year complicates talks, Interfax news service reported Friday, citing Ling Ji, director of the Department of Eurasian Affairs at the Chinese Ministry of Commerce. 

While an accord would make China Gazprom’s largest client, the country’s economy is grappling with industrial overcapacity, the fallout from a downturn in property investment and a volatile stock market. (by Elena Mazneva, Irina Reznik and Dina Khrennikova, Bloomberg Business)