China holds 'upper hand' in Russian gas exports
BEIJING, Mar 23: 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 going ahead, but Beijing has so far avoided an explicit commitment.
Analysts say the lagging response shows an imbalance favouring Beijing in energy deals between the two countries -- as well as China's wariness of over-reliance on Russia for fuel.
China is "in no rush to sign anything unless the proposal is favourable and is shaped on China's terms," researcher Marina Shagina at the International Institute for Strategic Studies (IISS) in Berlin told AFP.
The project was discussed during Chinese President Xi Jinping's summit with Russian leader Vladimir Putin in Moscow this week.
Putin said after talks with Xi that "all agreements have been reached" on the Power of Siberia 2 project.
But their joint statement only said the two sides will work on pushing 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 facilitate the transport of 50 billion cubic metres of gas to China annually, roughly on par with 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 (LNG), Russia's gas exports plummeted in 2022 after a flurry of Western sanctions over the Ukraine war.
As Europe looked for other suppliers, Moscow turned to alternative buyers including China, with which it is already linked by the first Power of Siberia pipeline. In 2022, China overtook Germany to become the top buyer of Russian energy.
It has paid a total of $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 Power of Siberia pipeline reached a record 15.5 billion cubic meters last year.
But sales to Asia pale in comparison with the 155 billion cubic metres of gas Russia exported to Europe prior to the Ukraine 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, a senior research fellow at the National University of Singapore's Energy Studies Institute.
And a potential Power of Siberia 2 gas deal would consolidate China as a long-term market, said Jaime Concha, a gas market expert at industry analysis firm Energy Intelligence. �AFP