Moscow visit: Xi glosses over Putin’s new 'anti-EU' gas pipeline
Russia’s leader highlights the building of the Power of Siberia 2 pipeline by 2030, but China keeps it out of the final declaration. While willing to buy more Russian gas at discounted prices, Beijing also wants to keep its traditional suppliers. The Chinese are already in talks with the Turkmens for another pipeline.
Beijing (AsiaNews) – Based on the Kremlin's focus on energy relations with China, the agreement on building a second Siberian gas pipeline to provide Russian gas to its “no limits” partner seems to be the only actual result of Xi Jinping's three-day visit to Moscow, which ended this morning. However, someone in Beijing might think differently.
As expected, there was no serious breakthrough on Russia's war against Ukraine, with Vladimir Putin describing Xi's "peace plan" as a “basis for settling of the conflict”.
The Russian leader focused instead on the bilateral agreement to build the Power of Siberia 2 pipeline[*] to transport gas from Russia’s Yamal Peninsula, via Mongolia, to China. The structure had originally been intended to serve Europe.
When fully operational, Power of Siberia 2 is expected to deliver 50 billion cubic metres (bcm) per year. According to Putin, the new pipeline will be operational by 2030.
Taking into account the 38 bcm that another pipeline operating since 2019 is providing, and the 10 bcm from Sakhalin Island expected to be ready by 2026, Russia’s “strongman” expects Russia to be selling China 98 bcm per year by the start of the next decade.
For Putin, this is a problem, for not only that amount will not replace the almost 200 bcm per year that Moscow won’t be selling to Europe, following its invasion of Ukraine, but also because China does not really need all that Russian gas.
The Chinese are already importing 150 to 160 bcm of gas per year, more than 50 per cent from Turkmenistan, not Russia.
Last year Turkmenistan sent 43.2 bcm to China against 16.5 bcm by Power of Siberia 1. To these must be added gas from Kazakhstan as well as liquid natural gas from the United States, Qatar and Australia.
In the final declaration released by China’s Foreign Ministry, a vague reference is made to boosting “trade in energy, resources”, etc., but nothing explicit about the Power of Siberia 2 project.
As Reuters notes, in a separate statement, the Kremlin acknowledges that the issues related to the new pipeline have yet to be resolved.
Overall, China is likely to increase imports of Russian gas at favourable prices, while keeping several suppliers, so as not to become dependent on Russia (or anyone else).
In fact, Beijing is negotiating a new pipeline – the Central Asia–China Gas Pipeline D – that will deliver 25 bcm of gas annually for 30 years from Turkmenistan via Tajikistan and Kyrgyzstan.
[*] Also known as the China–Russia East-Route Natural Gas pipeline.
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13/07/2009
