China today signed a landmark agreement with Russia that will see it buying a reported $400 billion in natural gas over 30 years. The decade-in-the-making deal will have Gazprom supply China's state-owned gas company with up to 38 billion cubic meters of gas each year starting in 2018, reports USA Today. That's about 25% of what China consumes annually, the AP notes. The news is largely being painted as an important easing of Russia's economic reliance on the West. Currently, most of its gas goes to Europe, and with this agreement, "we will be able to show to Europe that we have other customers," says one Russian official. And while the signing of the deal was trumpeted, many of its details were kept secret.
The $400 billion figure is what Gazprom's CEO cited to Russian media, but he also said the price of the gas "is a commercial secret." And the Washington Post reports that the true price tag "remained a mystery hours after the signing, raising suspicion for some of the Kremlin’s skeptics that it had dropped the price significantly for China in a desperate maneuver to shore up a steady cash flow." As Forbes notes, "it is far from clear who will make how much money from it." Based on the $400 billion figure, Forbes calculates China will pay roughly $350 per 1,000 cubic meters, about on par with the $360 average Europe is reported to have paid last year. But in this case, Gazprom will first have to build a new oil pipeline, at a rumored $30 billion cost.