Russia Wants Another Major Gas Pipeline To China

OilPrice.com: Russia Eyes Another Massive Gas Pipeline To China

The Chinese and Russian leadership have over the years intensified political and economic collaboration. Troubling relations with the West in general and the U.S. in particular are increasingly driving Beijing and Moscow into each other's arms. The countries' economies are highly complementary, which is an opportunity for further integration. While China has become the world's factory and an important technological powerhouse, Russia is extremely wealthy in terms of energy and minerals.

The obvious advantages have led to the landmark $400 billion ‘Power of Siberia pipeline’ agreement for the export of natural gas from Russia’s far east to northern China. On top of this success, Gazprom and Moscow have been pushing for the 'Power of Siberia-2 pipeline’ from Western Siberia to China’s Xinjiang region. The proposal has been met with a lukewarm response from Beijing because the region is already well-supplied with Central Asian gas. However, due to the Coronavirus pandemic and Gazprom’s adjusted plan, the Power of Siberia-2 project is gaining momentum.

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WNU Editor: I do not think this second pipeline is going to happen. When the landmark $400 billion ‘Power of Siberia pipeline’ agreement for the export of natural gas from Russia’s far east to northern China was made a few years back, my Chinese contacts told me that China got the short end of this agreement, paying for gas that they could get cheaper elsewhere. Today, global gas prices are now at the lowest that they have been for years, but China is still paying a premium for Russian gas. Not a smart business move for China if you ask me. And then there is the U.S. - China trade tensions. Relations may be tense between China and the U.S., but China knows that its long term economic interests must include having access to US markets. Buying surplus American energy is one of US the conditions to make this happen.