After two decades of discussion, China and Russia finally agreed this year to share the $77 billion cost of building the “Power of Siberia” gas pipeline from Russia to China. On May 21, 2014, the two countries signed a $400 billion deal to ship 38 billion cubic meters (bcm) of gas to China beginning in 2018. Although the timing of the long-awaited gas pipeline agreement from Russia to China highlighted the changed geopolitical context in the midst of the Ukrainian crisis, this was not what broke the deadlock between the two countries over pricing, routing, and upstream investments. The drivers were largely economic, though there are important geopolitical consequences.
