Page 18 - GLNG Week 12 2023

GLNG FORMER SOVIET UNION GLNG

Putin says Russia ready to increase

oil and gas supplies to China

RUSSIA RUSSIAN President Vladimir Putin has said imports expanded by 33% to 76.4mn tonnes.
that Russia is ready to increase oil supplies to However, analysts believe that despite
Russia is grappling with China, its key energy partner, following a meet- increasing shipments via its Far Eastern port
the impact of the loss ing with Chinese President Xi Jinping in Mos- of Kozmino in 2022, infrastructure limitations,
of the European energy cow on March 20-21. such as existing export capacity, could restrict
market. “Russia is prepared to increase uninterrupted Russia’s ability to increase supplies further.
oil supplies to support development of the Chi- Russia delivers oil to China via the major East
nese economy,” Putin said, after a meeting with Siberia Pacific Ocean pipeline, transit through
Chinese President Xi Jinping in Moscow. Kazakhstan and via tanker, but all these options
Russia has been increasing its oil deliv- are maxing out.
eries to China since the invasion of Ukraine, The Northern Sea Route (NSR), which runs
with a record high of 2.01mn barrels per day through Russian territorial waters in the Arctic,
(bpd) in February, according to China’s Gen- is among future plans to expand energy co-op-
eral Administration of Customs data released eration between the two countries. It has shorter
March 20. delivery times and lower costs than traditional
According to Chinese customs data, Beijing’s routes, with less geopolitical risk.
spending on Russian energy, including coal, Chinese importers have benefited from dis-
crude oil, natural gas, and products, climbed counts on Russian crude, with the cost of Rus-
to $88bn in the 12 months up to February. This sian crude imports averaging $73.53 per barrel
surge in spending has come as other buyers have in February, a 13.7% drop from $85.23 per barrel
avoided Russian exports due to the ongoing war. in the same month the previous year. In compar-
Comparing this with the previous year’s data, ison, cargoes from Saudi Arabia averaged $83.15
Beijing spent $57bn, representing a considerable per barrel in February, reports S&P Global.
increase in outgoings.
Furthermore, the import data from this Gas to grow too
period indicates that Russia has now become Russia began supplying gas to China via the
China’s primary supplier of crude, surpassing Power of Siberia pipeline at the end of 2019.
Saudi Arabia. Additionally, it has become Chi- Supplies have increased to 15.4bn cubic metres
na’s second-largest source of coal, with Indone- in 2022, with expectations to reach 22 bcm this
sia being the largest, and the third-largest source year and 38 bcm per year in 2027.
of liquefied natural gas (LNG), trailing behind As second pipeline is planned to come online
Australia and Qatar. Notably, this ranking does in 2030. Almost all details of the Power of Siberia
not include volumes of gas transported overland, 2 gas pipeline, which has a planned capacity of
which China stopped reporting at the beginning 50 bcm per year and will run through Mongo-
of last year. lia, have also been agreed with China, said the
The data also shows that crude imports Russian president. Putin also said that, by 2030,
from Russia have risen to 89.3mn tonnes since Russia will supply China with at least 98 bcm of
the Ukraine invasion, compared with 78.4mn gas and 100mn tonnes of LNG.
tonnes in the preceding period, which has On March 20, Gazprom reported that its gas
overtaken Saudi Arabia’s 86.8mn tonnes. Fur- exports to China via the route hit a new daily
thermore, Chinese purchases of Russian LNG record, following a request for additional gas
increased by 52% to 6.86mn tonnes, while coal from China’s CNPC. ™

P18 www. NEWSBASE .com Week 12 24•March•2023