Russia’s $400 billion deal to supply natural gas to China likely has the sponsors of some of the more marginal liquefied natural gas (LNG) projects squirming. Despite the eye-popping figures associated with the contract, most observers believe there will still be ample demand for Australian LNG, both in China as well as in the rest of Asia.

To be sure, Australia’s ramp-up in this area is not beyond reproach. Indeed, at an energy conference in Canada this week, the CEO of Malaysian state-owned energy giant Petronas chided the Canadian government for its approach to LNG by citing Australia’s experience.

He said that Canada should heed “pivotal lessons” from Australia and not make some of the same mistakes that occurred Down Under, though he failed to get into policy specifics. While the Australian LNG space has seen more than $200 billion committed to investments over the past decade and has another seven major projects under construction, companies have suffered significant cost overruns ranging from 15 percent to 50 percent.

Most of that is a result of the rising labor and equipment costs fueled by the record investment in Australia’s resource boom. The latter also helped keep the Australian dollar above parity with the US dollar until last year, and the relatively strong aussie compounded the expense of operating there.

Even so, as the seven aforementioned export projects come on line between 2014 and 2017, Australia will eventually overtake Qatar as the world’s largest LNG exporter, with the country’s nameplate LNG capacity jumping from 24 million metric tons per year in 2013 to more than 80 million metric tons per year by 2017.

But now that China has secured a significant amount of natural gas at a favorable price, the question remains how this deal will affect global LNG prices. After all, the relatively high price of LNG bound for Asia has attracted plenty of competitors.

Australia certainly has an abundant supply of natural gas and proximity to Asia, but the high cost of doing business there, though now falling, could still undermine the economics of some projects, while causing prospective development to be tabled.

Production from prolific shale plays has created a veritable glut of cheap natural gas in the US and Canada, which has helped keep prices low in North America, recently near USD4.39 per MMBtu.

By contrast, the Asian supply of natural gas has failed to keep pace with growing demand, which means the region must import significant quantities of LNG. As such, there’s a huge spread between prices of North American natural gas and LNG that’s shipped to Asia.

For instance, the forward price of the generic contract for LNG scheduled for delivery to northeast Asia in the next month is currently USD14.40, though that price was as high as USD18.95 last November. And China currently pays USD15 per MMBtu for Australian LNG, according to the Australian Financial Review.

The opportunity to exploit the pricing differential between these two markets has prompted numerous energy companies to pile into the LNG export arena.

Still, these projects and their associated contracts are so massive and complex that they can first take many years to negotiate and then at least several more years to build. For instance the deal between Russia and China was only consummated after about 10 years of negotiations, which included prior supply agreements with pricing a perpetual sticking point–until now.

Western efforts to isolate Russia both financially and politically for its involvement in Ukraine’s political crisis may have caused it to finally make the pricing concessions necessary to overcome the impasse.

According to Leslie Palti-Guzman, a senior energy analyst at New York-based Eurasia Group, political fallout from the Ukraine crisis threatened Russian access to Western credit in the short term, while likely eroding Russia’s share of the European gas market in the long term.

Moscow’s sudden financial needs coalesced with China’s aggressive environmental strategy to curb emissions by switching from coal to gas-fired power generation–the country wants cleaner-burning natural gas to account for 10 percent of its fuel mix by 2020, up from 6 percent currently. As a bonus, both countries also get to demonstrate their political and economic independence from Western powers.

The deal signed between Russia’s state-controlled OAO Gazprom and the state-owned China National Petroleum Corp (CNPC) encompasses a 30-year contract to supply 38 billion cubic meters (bcm) per year, with the potential to expand pipeline capacity to 61 bcm per year.

Although the two countries did not disclose many of the terms of the deal, including pricing, analysts estimate China will be paying around USD10 per MMBtu, which is far less than the cost of LNG imports and may be even somewhat cheaper than gas supplied to China via an existing pipeline from Turkmenistan. Not only that, this price is lower than the USD12 per MMBtu reportedly necessary for Gazprom to break even when accounting for pipeline construction.

In exchange for this rock-bottom pricing, it’s believed that China will prepay about USD22 billion in order to help finance the construction of about 4,000 kilometers of pipelines, which are expected to cost about USD55 billion altogether.

Even though the numbers involved appear staggering, Australian LNG should still enjoy robust demand.

For one, both Japan and South Korea are also major importers of LNG, while China also remains in play. Because of the Middle Kingdom’s enormous and growing energy demand, its contract with Russia only covers a slim percentage of future energy demand.

By 2020, China is projected to consumer around 420 bcm per year, which means that roughly two years after gas starts flowing from Eastern Siberia to China, the imports under this contract will only account for about 9 percent of the country’s demand. And the International Energy Agency forecasts China’s natural gas demand will quadruple by 2035.

China’s insatiable demand means that it can’t rely on any one country for supply. Indeed, the country intends to fulfill its energy needs by diversifying among a number of different countries and even has ownership stakes in LNG projects in both Australia and Canada.

And while there’s plenty of speculation about what China will be paying for Russian gas, some industry experts note that we’ll never actually know these figures and that, therefore, it will be difficult for them to affect LNG pricing. Additionally, the Eastern Siberia gas fields tied to this contract are so remote that they can really only serve China. So that also means this deal might not set much of a precedent for LNG pricing.

In the end Australia boasts one other attraction that Russia does not: dependability. Both China and Russia have a history of deep mistrust, and the Chinese are understandably wary of Russia’s reliability as an energy supplier, given how they’ve behaved in other contexts.

Following the deal’s announcement, Woodside Petroleum’s (ASX: WPL, OTC: WOPEF) CEO Peter Coleman echoed this sentiment, “The Chinese have been very good over time at managing security of supply, so I don’t believe they are going to over-commit to any one particular source of gas over time.” While one of Woodside’s LNG projects has a contract to supply China with gas, most of its other projects and marketing efforts are oriented toward Japan.

Mr. Coleman said that while China is an important part of the LNG story, it’s not the whole story, particularly given the rapid development of LNG import facilities in new markets such as Vietnam and the Philippines, and as some traditional LNG exporters become net importers.

Australian LNG should continue to be a source of long-term growth for the country. And with the aussie trading at a more reasonable level, it will become more affordable to undertake new projects there.