Russia is expected to deliver 25% higher volumes of natural gas via pipeline to China this year, compared to 2024, an anonymous source with knowledge of the flows told Reuters on Monday.
Russia has been boosting both its pipeline and liquefied natural gas (LNG) exports to China this year, as its sales are being shunned in Europe, Moscow’s previous top export market.
The EU, earlier this month, even managed to reach an agreement on how to phase out imports of Russian gas.
As a result of lost markets in Europe, Russia is pivoting to China and other Asian markets to ship its gas.
This year, Gazprom, the Russian gas giant, is set to ship 38.6-38.7 billion cubic meters of natural gas via the Power of Siberia pipeline to China, up from 31 billion cubic meters last year and above the planned annual capacity of 38 billion cubic meters, according to the source who spoke to Reuters.
Russia wants to have a second natural gas pipeline to China and the two countries earlier this year signed a legally binding memorandum to move forward with a second pipeline to carry gas from Russia’s huge Siberian fields to China via Mongolia.
Russia has tried for years to get China to commit to the Power of Siberia 2 pipeline, without success. Now a legally binding memorandum has been signed, but key sticking points remain – including the price China will (be willing to) pay for the supply. It’s not clear who and how will finance the huge multi-billion-dollar project, either.
The construction of the second Power of Siberia gas pipeline from Russia to Northern China could take up to 10 years because it involves “tremendous work, jobs and negotiations,” the president of the research division of China's state energy giant CNPC said earlier this month.
Meanwhile, Russian LNG flows to China in November jumped more than twofold from a year earlier to reach a record high 1.6 million tons, making the country China’s second-largest LNG seller after Qatar.
By Charles Kennedy for Oilprice.com