Securing deal with China is key for Russia, Gazprom

|By:, SA News Editor

Russia is set to sign a $100B deal to supply cheap gas to China that will weaken international sanctions against Moscow, as the two countries begin joint military exercises tomorrow in disputed waters off the coast of Japan.

Europe, Gazprom’s (OGZPY) main customer, is seeking alternative suppliers as the Ukraine crisis adds pressure on governments to reduce ties with Russia, and Gazprom also faces pressure from domestic competitors; Gazprom "cannot afford to lose this deal," says the head of a Russian energy research firm.

Meanwhile, the EU will aim to resolve the dispute between Russia and Ukraine over gas prices by June 1 with two more rounds of talks planned for next week.