Russian President Vladimir Putin and China’s President Xi Jinping shook hands during a signing ceremony after their talks at the Kremlin in Moscow on 21 March 2023 (photo by Vladimir Astapkovich / Sputnik / AFP). A massive new gas pipeline to China could help reduce Russia’s reliance on European buyers, but analysts say the project reveals a growing imbalance between the longtime strategic allies. Beijing emerged as an economic lifeline for Moscow last year, especially through energy purchases, after Western sanctions over Russia’s invasion of Ukraine cut off crucial trade links.
Moscow is confident that the new pipeline—Power of Siberia 2—is moving forward, but Beijing has so far avoided an explicit commitment. Analysts argue that this lagging response shows an imbalance favoring Beijing in energy deals and reflects China’s wariness of over‑reliance on Russian fuel. “China is in no rush to sign anything unless the proposal is favourable and is shaped on China’s terms,” researcher Marina Shagina of the International Institute for Strategic Studies in Berlin told AFP. The project was discussed during Xi’s summit with Putin in Moscow this week. After talks with Xi, Putin said “all agreements have been reached” on Power of Siberia 2, yet the joint statement only pledged to push forward “research and consultation” on the pipeline. The Chinese foreign ministry did not respond to a request for more details.
Power of Siberia 2 could transport 50 billion cubic metres of gas to China annually, roughly comparable to the total capacity of the controversial Nord Stream 2 pipeline from Russia to Germany. A senior Russian official suggested last year that it could strategically replace Nord Stream 2. Previously the world’s largest exporter of liquefied natural gas, Russia’s gas exports plummeted in 2022 after a wave of Western sanctions over the Ukraine war. As Europe sought other suppliers, Moscow turned to alternative buyers, including China, which is already linked by the first Power of Siberia pipeline. In 2022, China overtook Germany to become the top buyer of Russian energy, paying $12.2 billion for coal, gas and oil from Russia so far this year, according to the Helsinki‑based Centre for Research on Energy and Clean Air. Russian gas deliveries to China through the existing pipeline reached a record 15.5 billion cubic metres last year, but sales to Asia remain small compared with the 155 billion cubic metres Russia exported to Europe before the war.
“Russia is desperate to send as much gas as possible eastwards as Europe strives to reduce its dependence on Russian gas,” said Philip Andrews‑Speed, senior research fellow at the National University of Singapore’s Energy Studies Institute. A Power of Siberia 2 deal would cement China as a long‑term market, according to Jaime Concha, a gas‑market expert at Energy Intelligence. Russia’s existing pipeline infrastructure was largely built for the European market; building an equivalent network in Asia would be costly and time‑consuming, Concha told AFP, “which shows how few alternatives Russia has”.
China, meanwhile, has sought a diverse set of energy suppliers. It has signed numerous long‑term gas deals worldwide, including a $60 billion, 27‑year agreement with Qatar in November. “Chinese policymakers also observe the lessons from Europe of over‑reliance on Russian energy imports,” said Yan Qin, lead carbon analyst at Refinitiv. With a strengthened position in energy negotiations, “China emerged as the winner from the war in Ukraine,” IISS researcher Shagina told AFP. “Beijing capitalised on Moscow’s international isolation and ramped up its purchases of heavily discounted Russian oil, gas, and coal.” At the same time, China has felt the impact of turmoil in global energy markets. The war in Ukraine has pushed thermal‑coal prices at China’s Qinhuangdao port “almost as high as Europe”, Qin noted, while rising LNG prices have hit gas‑power plants and industrial users. Ultimately, the Power of Siberia 2 pipeline could “enhance China’s gas‑import capacity greatly and potentially reduce China’s LNG‑import demand”.
Comments are closed for this story.