Vladimir PutinRussia’s president, announced new Russian oil and gas deals with China worth an estimated $117.5 billion, vowing to boost Russian exports from the Far East at a time of heightened tensions with European customers over Ukraine.
Russia, already Beijing’s third-largest gas supplier, has strengthened its ties with China, the world’s largest energy consumer, reducing its dependence on its traditional European customers.
Gazprom, which has a monopoly on Russian gas exports by pipeline, has agreed to supply China’s state-owned energy company CNPC with 10 billion cubic meters of gas a year, the Russian company and a Beijing-based industry official said.
The first flows through the gas pipeline, which will connect Russia’s Far Eastern region with northeastern China, were due to start in two to three years, the source said in comments that were later followed by Gazprom’s announcement of the deal.
Russia already ships gas to China through its Power of Siberia pipeline, which began pumping supplies in 2019, and by shipping LNG. It exported 16.5 billion cubic meters (bcm) of gas to China in 2021.
The Power of Siberia network is not connected to pipelines that send gas to Europe, which has faced rising gas prices due to tight supplies, one of several points of tension with Moscow. According to plans drawn up earlier, Russia intended to supply China with 38 bcm of gas via pipeline by 2025.
The new deal, which coincided with a visit by Russian President Vladimir Putin to the Beijing Winter Olympics, would add another 10 bcm, boosting Russian pipeline sales under long-term contracts to China.
Gas sales alone could generate some $37.5 billion over 25 years, according to Reuters calculations, assuming an average gas price of $150 per 1,000 cubic meters, as reported by Russian gas giant Gazprom for its current agreement with China.
Source: Larepublica
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