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Facing Western sanctions, Putin toasts 30-year gas deal with China

May 22, 2014 at 6:44 PM EDT

GWEN IFILL: Now to a massive energy agreement worth hundreds of billions of dollars between two nations whose relationships with the United States grow more tense by the day.

Jeffrey Brown reports.

JEFFREY BROWN: The $400 billion deal became reality at this ceremony in Shanghai yesterday. Russian President Vladimir Putin and his Chinese counterpart, Xi Jinping toasted the 30-year pact between their state-controlled gas monopolies.

PRESIDENT VLADIMIR PUTIN, Russia (through interpreter): This will be the biggest construction in the world for the next four years, without any exaggeration. It is new enterprises and thousands of new workplaces.

JEFFREY BROWN: Today, a spokesman for China’s Foreign Ministry also hailed the agreement.

HONG LEI, Spokesman, Chinese Foreign Ministry (through interpreter): These deals play a significant role in promoting comprehensive energy cooperation and the overall strategic partnership between China and Russia.

JEFFREY BROWN: To make it all happen, Russia will lay thousands of miles of new pipelines across Siberia, sending natural gas to China’s major cities as early as 2018. The deal is a victory for Putin at a moment when Russia faces Western economic sanctions over its actions in Ukraine.

In Washington, State Department spokeswoman Jen Psaki said yesterday the sanctions will go forward regardless.