With the new gas pipeline megaproject between China and Russia, Moscow hopes to reduce its dependence on its European buyers but risks aggravating the imbalance in its trade relations with Beijing, which has been accentuated since the invasion of the Ukraine, analysts say.
Celebrated by Vladimir Putin during the recent visit to Moscow by his Chinese counterpart Xi Jinping, the titanic Siberian Force 2 project would provide a vital commercial outlet for Russian gas, which the West has hit with sanctions in retaliation for the invasion of the ‘Ukraine.
Moscow wants to believe that this 2600 kilometer gas pipeline, linking Siberia to Chinese Xinjiang and through which 50 billion m3 of gas, is on the right track. Eventually, its capacity should be roughly equivalent to that of the controversial Nord Stream 2 gas pipeline linking Russia to Germany.
But the enthusiasm is more measured on the Chinese side. So far, Beijing has avoided any formal commitment to this project, the timetable for which is still very vague.
If the Russian president affirmed to Mr. Xi that “all agreements have been concluded” between the two countries on this gas pipeline, their joint press release is limited to encouraging “research and consultations”.
According to experts, the Chinese wait-and-see attitude reveals both Beijing’s position of strength vis-à-vis Moscow and its wish not to depend excessively on Russia for its energy supply.
China “is in absolutely no rush to sign anything unless the proposal is favorable to it and is modeled on the conditions” it has set, said Marina Shagina, an expert at the International Institute for Strategic Plans (IISS) of Berlin.
Asked by AFP, the Chinese Ministry of Foreign Affairs did not respond.
“Russia is desperate”
Once the world’s largest exporter of liquefied natural gas (LNG), Russia saw its gas exports collapse in 2022 under Western sanctions.
While the European Union was looking for new sources of gas supply, Russia turned to other buyers, in particular China, to which it is already connected via the Siberian Force 1 gas pipeline. A record volume of 15.5 billion m3 transited through this pipeline last year.
In 2022, China has thus dethroned Germany to become the first buyer of Russian energy products. And in 2023, Beijing has already paid Moscow $12.2 billion for its coal, gas or oil, according to the Helsinki-based Center for Clean Energy and Air Research.
However, Russian energy sales to Asia remain modest compared to 155 million m3 that Moscow was exporting Europe before the war in Ukraine.
“Russia is desperately trying to send as much gas as possible east as Europe struggles to reduce its dependence on Russian gas,” says Philip Andrews-Speed, a researcher at the Institute for Gas Studies. Energy from the National University of Singapore.
But the obstacles are not small.
The existing network of pipelines in Russia has been “mainly structured to respond to the European market”, analyzes Jaime Concha, expert in the gas market at the firm Energy Intelligence.
Building an equivalent network in Asia would, according to him, be costly and time-consuming, which shows “the few alternatives available to Russia”.
“Lessons from Europe”
At the same time, China has sought to diversify its sources of supply and has signed a series of gas agreements around the world, notably in November with Qatar for an amount of 60 billion dollars and a duration of 27 years.
“Chinese leaders are also learning lessons from Europe about its overreliance on Russian energy imports,” said Yan Qin, a coal specialist at Refinitiv.
Due to the strengthening of its position in the energy negotiations with Russia, “China emerged as the big winner of the war in Ukraine”, says Marina Shagina of the IISS, according to whom Beijing has “benefited from the isolation of Moscow”. to speed up its purchases of Russian gas, oil and coal at “bargain prices”.