OREANDA-NEWS. June 03, 2014. PetroChina Co. , the country’s biggest oil and gas producer, and the nation’s utilities stand to win from Russia’s USD400 billion deal to supply gas to China, which will will provide the fuel at a price lower than expected.

“The deal is an economic game changer as PetroChina lands an attractive gas deal at a price that carries a 10 percent discount to what EU countries are currently paying, and a 40 percent discount to current LNG prices,” said Gordon Kwan, head of oil and gas research at Nomura International Hong Kong Ltd.

China National Petroleum Corp., PetroChina’s state-owned parent, and Russia’s OAO Gazprom (OGZD) yesterday signed the agreement in Shanghai to supply 38 billion cubic meters of gas annually over 30 years. PetroChina runs most of CNPC’s pipeline, refining and marketing businesses.

While precise commercial terms weren’t disclosed, Oleg Maximov, an analyst at Sberbank CIB, said the outline provided by Gazprom suggests a price of USD 350 to USD 380 per 1,000 cubic meters.

“This could potentially lift PetroChina’s earnings per share estimate by about 10 percent, once gas sales start in 2018 or 2019,” Nomura’s Kwan said.

China-based natural gas distributors such as China Gas Holdings Ltd. and Beijing Enterprises Holdings Ltd. also stand to gain as their profits are linked most closely to gas sales.