China plotting to 'exploit Russia' to expand into Indo-Pacific
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Since the Russian president invaded Ukraine over a month ago, Western powers have been looking to end their reliance on Russian gas. While the UK vowed to end all imports of Russian oil by the end of the year, the EU, which is heavily reliant on Russian gas, has planned to reduce Moscow’s energy imports by half by the end of the decade.
Since the West hit Russia with sanctions over its invasion of Ukraine, Putin has turned East, towards India and China for new trade deals.
Last month, Gazprom, the Russian state-owned fossil fuel giant has signed a contract to design the Soyuz Vostok pipeline across Mongolia toward China.
The statement said that this new pipeline “will be a continuation of the Russian gas pipeline Power of Siberia 2”.
In the past year, China’s natural gas imports from Russia rose by a massive 50.5 percent, as the two countries deepen ties.
However, experts have warned that even in this scenario, China can only about two-thirds of the current volume that Russia sells to the EU.
According to Tatiana Mitrova, a research fellow at the Centre on Global Energy Policy, Columbia University, the revenue Russia earns from pipelines to China would be no match for the money it receives from Europe, due to the low contracted price.
She said: “They are definitely not able to offset the whole exports which are now going to the West.”
According to a statement from Gazprom, China is the world’s fastest-growing gas market, with the nation’s total natural gas imports increasing by 19.9 percent in the past year, with pipeline gas imports rising more than 22 percent year on year.
Last year, Russia exported 16.5 billion cubic metres (bcm) of gas to China via pipelines and in the form of liquefied natural gas.
As the two countries deepen ties, plans have been proposed that will drastically boost the flow of gas to nearly a 100bcm, will also increasing LNG sale.
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However, this pales in comparison to EU deals Russia, as the Kremlin exports about 170 bcm of natural gas to the European markets every year at “dramatically different” prices, according to Ms Mitrova.
Given how Russia is badly hit by Western sanctions, she added that Russia and China might trade with products in exchange for gas.
She said: “You remember this ‘oil for products’ programme in Iran? It’s rather moving in this direction, not about trading, but just about providing the inflow of the most necessary goods and products.”
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