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. Last Updated: 07/27/2016

Putin and Nazarbayev Sign Gas Deal

ST. PETERSBURG -- President Vladimir Putin came to an agreement with Kazakhstan's president Monday at the Group of Eight summit to create a joint venture to process natural gas from Kazakhstan's giant Karachaganak gas field.

Under the terms of the deal, both countries would have an equal share in the venture, which will expand the capacity of the Soviet-built Orenburg refinery.

Putin called the project -- which calls for an annual output of at least 15 billion cubic meters -- a "humble but important" contribution to energy security, the central theme of Russia's G8 presidency.

"We are entering a very important alliance," Kazakh President Nursultan Nazarbayev said. "It is a major step forward."

The deal comes as competition for Kazakhstan's energy resources intensifies. U.S. Vice President Dick Cheney paid a high-profile visit to the country in May to lobby for American energy interests. European Union energy commissioner Andris Piebalgs also traveled to the Kazakh capital, Astana, in May to discuss the possibility of a Europe-bound gas pipeline that could skirt Russia.

The Karachaganak field is one of the crown jewels of Kazakhstan's hydrocarbon riches.