This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Russia and China Sign Mega Gas Deal That Changes Everything

NEW YORK (TheStreet) -- I was talking today to Jim Cramer about the blockbuster natural gas deal that was signed between Russia and China. The 30-year, $400 billion deal to ship Russian gas via pipeline to Eastern Chinese cities changes everything.

First, it changes the calculus of U.S. relations with Russia and China. Now that the two superpowers are connected much more closely through energy supply, the U.S. will find both nations less easy to influence. Their combined economic cooperation makes each stronger.

But from a global energy standpoint, the deal couldn't be more important. Russia's Vladimir Putin used the opportunity of this Chinese summit to complete a deal that has been threatened for almost 10 years, delivering the concessions needed to find another very stable market for Russian gas exports, which will in turn make them far less reliant upon Eastern Europe and EU sales.

That, in turn, gives them far greater leverage into the Ukraine outcome and with a ready customer to the East; they are far more capable of turning the spigots down in the winter to the West in order to accomplish political goals.

The total deal on gas to China will ultimately amount to more than 60 billion cubic meters a day, or almost half of the volume that Russia shipped to all of Europe in 2013. With that kind of alternative market, there is going to be a frantic thrashing in European capitals to quickly find reliable sources of natural gas outside of Russian pipes.

Must Read: Booming High-End Retail, Slumping Low-End: StockTwits

Some massive investment opportunities will arise from this. The first that occurs to me is Noble Energy (NBL), which just had its major partner in the Levant basin, Woodside Petroleum (WPL) walk away. I believe Woodside is kicking itself right now as the Chinese/Russian gas deal has made Leviathan natural gas in the Mediterranean worth a heckuva lot more than it was 24 hours ago.

I believe that instead of devaluing the Leviathan project, Noble will have multiple suitors at its door looking to replace Woodside as a partner. One guess I have is Total (TOT), the French giant that has a terrific record in Middle East markets and a still good relationship with the Israeli government.

Other quickly ramping LNG sources in Asia and Africa will also be more valuable in light of this deal. One that comes to mind is the Mozambique LNG project being undertaken by Anadarko (APC).

I talk more about this mega-deal and its implications with Jim in the video above.

At the time of publication, Dicker was long Noble, although positions may change at any time.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Dan Dicker has been a floor trader at the New York Mercantile Exchange with more than 25 years of oil trading experience. He is a licensed commodities trade adviser.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $95.18 0.00%
FB $117.43 0.00%
GOOG $692.36 0.00%
TSLA $232.32 0.00%
YHOO $36.01 0.00%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs