Russia, strengthens ties with China via new gas pipelines

The two countries are in talks for the Power of Siberia 2 gas pipeline. 

Russia and mainland China are reinforcing their relationship with new gas pipeline projects to China following sanctions against Russia due to its invasion of Ukraine, according to a report by BMI.

Russia delivers gas to China through the Power of Siberia 1 pipeline in 2019 and will gradually increase supplies up to 38 billion cubic metres (bcm) in 2027. Chima is also importing through pipelines from the Sakhalin field which can send up to 10 bcm.

The two countries are currently in talks for the Power of Siberia 2 pipeline which could increase supplied gas to China by 50 bcm starting in 2030.

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“China stands to benefit as Moscow faces the threat of the permanent loss of natural gas markets in Europe. European Union (EU) has indicated it aims to quit Russian gas by 2027. If the EU is successful, it is likely that Russia could face more gas being stranded at home,” BMI said.

“Since Russia has limited options to export large volumes to none other than Europe, China is the only country considered to have the ability to absorb large amounts of Russian gas though this would require new significant investment in pipelines infrastructure,” it added.

Aside from Russia, China is importing gas from Turkmenistan, Myanmar, Kazakhstan, and Uzbekistan, with Turkmenistan as its top supplier.