Russia has trouble exporting more gases to China. Beijing, reluctant to invest in a new gas
XI Jinping and Vladimir Putin at Kremlin, photo: Russian Pool / Associated Press / Profimedia Images
China wants to buy more gases from Russia, the current Power of Siberia 1 pipeline, given that no progress has been made on the construction of the second pipe, Power of Siberia 2, have revealed for Reuters two sources in the energy industry, Agerpres reports.
Energy is expected to occupy an important place on the agenda of the next week's meeting of Russian and Chinese presidents, Vladimir Putin and Xi Jinping. However, the sources quoted by Reuters say that it is unlikely that progress on the Power of Siberia 2 gas pipeline is unlikely, a project of $ 13.6 billion that would deliver 50 billion cubic meters of gas to the northwest of China.
Instead, the sources claim that China is considering the increase of gas purchases via the current Power of Siberia 1 pipe, which is 38 billion cubic meters per year.
For over 50 years, Russia delivered natural gas to Europe western Siberia, deliveries that were at 180 billion cubic meters a year and brought Moscow up to $ 90 billion a year. In 2019, Russia began delivering to China gases from the deposits of Eastern Siberia via Power of Siberia. Moscow and Beijing have not yet reached an agreement on gas price and financing for the Power of Siberia 2.
China's gas need is decreasing
Increased China's internal gas production as well as increased renewable production has reduced Beijing's energy appetite, even if geopolitical risks, such as sanctions, make more attractive gas imports, says Tatiana Mitrova, an expert at Center on Global Energy Policy.
A source of the Gas industry quoted by Reuters has revealed that Gazprom and China National Petroleum Corporation discussed the increase, up to six billion cubic meters per year, of gas delivery Via Power of Siberia 1. This increase of deliveries would bring Gazprom an increase of $ 1.5 billion per year, based on a $ 250 calculation price. A second source also revealed that Pipechina, the state company that manages the China gas network, started a study for the extension of the internal transport infrastructure, waiting for the increase of Russian gas supplies via Power of Siberia 1.
Russia and China discuss the increase of the quantities of gas delivered via Power of Siberia 1 to 45 billion cubic meters, said Sergey Sanakoev, the director of Asia-Pacific Center in Moscow, which was involved in energy discussions between Russia and China. In turn, the Gazprom group claims that Power of Siberia 1 can carry more gases than the nominal capacity of 38 billion cubic meters.
“This does not mean that the Power of Siberia 2 project will be abandoned,” said Sanakoev.
Also, Russia intends to start providing gas to China via a pipe of Sahalin Island, from 2027. These plans are aimed at delivery of 10 billion cubic meters per year.
