Russian energy company GazProm sign a loan agreement with Bank of China. GazProm The €2 billion ($2.17 billion) on a 5-year loan, and the largest loan the company has ever borrowed from single lender.

On Thursday, GazProm announced the Russian energy company has signed a € 2 billion($2.17 billion) agreement with Bank of China for 5-year loan. In a statement as quoted by Financial Times the company said, "This is the largest deal in Gazprom's history based on the size of financing obtained directly from one credit organisation, and the first bilateral credit deal with a Chinese bank."

Two years earlier in 2014, GazProm signed a deal with China National Petroleum Corporation (CNPC) to supply $400bn of gas to China for the next 30 years. Reuters reported that capital expenditure in 2016 for the project with CNPC is estimated at around $2.3 billion, with total project cost at $55 billion.

After the deal, GazProm tried to find financing package to build a new pipeline to transport gas to China. Last October, GazProm raised €1 billion($1.09 billion) via a three-year Eurobond.

Following the declining relationship with the West, Russian companies and banks look to Asia as funding alternatives. As Western world imposed sanction on Russia over its involvement in Ukrainian conflict. The sanctions has restricted access for Russian companies into European and Western capital market.

Nevertheless, Western sanction has increased cooperation between China and Russia. Wall Street Journal reported that Western sanctions are increasing Russia's economic reliance on China.

Whereas GazpProm announced the loan from with Bank of China, as the world's biggest energy consumer, China gain benefit as well. The deal has further expanded China's investment in Russian energy sector, giving China more acess to Russia's huge hydrocarbon reserves.

Last September, China and Russia has signed another memorandum to on Russian gas supply from the country's Far East to China. This will create a new route for gas transport to China along with two other gas pipelines. China also agreed to increase its stake in $27 billion liquefied-natural-gas project in the Arctic.

Beside GazProm and energy sectors, other Russian companies also look to China for debt and equity financing. Among the list are mining company Norilsk Nickel, petrochemical company Sibur and AFK Sistema, state development bank VEB, Megafon and Yamal LNG.

GazProm has secured its €2 billion ($2.17 billion) loan on a 5-year term from Bank of China. The loan was recorded as the largest loan GazProm has ever borrowed from one lender. While Russia and China are increasing cooperation on energy sector and other sectors as well.