Senior Russian and Chinese officials have discussed LNG and pipeline gas supply from Russia to China and cooperation in joint energy projects, the Russian Energy Ministry said this week.
Russian Energy Minister Sergei Tsivilev and Chinese Ambassador to Russia, Zhang Hanhui, discussed LNG deliveries, developing natural gas transportation infrastructure, and expanding cooperation in the oil and coal industries.
China has become a top buyer of Russian energy since the Kremlin’s war in Ukraine cut off most of Russia’s oil, gas, and coal supplies previously headed to Western countries. Embargos and price caps on Russian oil and products have prompted Russia to turn east and expand its exports to Asia.
China is buying cheaper Russian oil and pipeline gas, but hasn’t committed yet to a major new natural gas pipeline from Siberian gas fields.
Russia’s giant Gazprom started sending gas to China via the Power of Siberia pipeline at the end of 2019, and flows have now reached the maximum design capacity.
But a significant boost to supply that would more than double the current flows with a new pipeline, Power of Siberia 2, looks further away than it did earlier this decade.
China has been negotiating from a position of strength after becoming Russia’s key gas customer and key trade partner in all other areas following the invasion of Ukraine, which severed decades-long gas supply relations between Russia and Europe. Russia appears to be struggling to convince China to take on more pipeline gas amid disagreements over the price China would pay.
Last month, Tsivilev said that Russia is in an active stage of talks with China over the Power of Siberia 2 gas pipeline.
Despite the touted “active” talks, it is unlikely that Russia and China will sign an agreement on the proposed gas pipeline soon, Russian news agency TASS quoted Tsivilev as telling reporters.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
- Permian or Bust? U.S. Oil Growth Has a One-Basin Problem
- Putin Extends Russian Oil Export Ban to Price Cap Countries Through 2025
- Gasoline, Distillate Builds Spook Oil Markets
