Illegal export was heading for China, before smuggling chain busted in major operation in Khabarovsk region.
Aim to double annual bilateral trade to $10 billion by 2016.
The Russian president pledges to open up exports of liquefied natural gas to meet Far East demand.
Analysts say opening of LNG facility in Queensland with exports to China could affect Yamal as Pacific countries look to take on Russia in Asia.
'The contract in current market parameters is absolutely unprecedented', Putin told investors at the annual Saint Petersburg International Economic Forum.
New field will enable eventual exports to China via 'western route' through Altai Mountains.
Construction launched on 3,968 kilometre 'Power of Siberia' gas pipeline.
Yevgeny Savostyanov fears loss of land after becoming too dependent on Beijing.