Page 4 - AsianOil Week 06 2022

AsianOil COMMENTARY AsianOil

Russia expands China

ties with new gas deal

China and Russia are expanding their ties at a time when

both countries have tense relations with the West

POLICY RUSSIA and China have clinched a new gas sup- to attend the 2022 Winter Olympics. Moscow
ply deal, as Moscow doubles down on its pivot and Beijing are eager to stress their close ties
WHAT: towards Beijing against a backdrop of height- in the face of worsening relations with the US.
China and Russia have ened tensions with the West over Ukraine. According to the Kremlin, up to 15 agreements
signed a 10 bcm per year Russia’s national gas company Gazprom could be signed between the two countries dur-
gas supply deal. announced on February 4 that it had agreed on ing Putin’s visit.
the annual sale of 10bn cubic metres per year
WHY: of natural gas to China’s CNPC over a 30-year Expanding ties
The contract builds on period. The agreement underpins the develop- Russia has been steadily expanding its economic,
a 38 bcm per year deal ment of a new export route for Russian gas to and more recently, its political ties with China
agreed in 2014. China in the Far East. over the past decade, and energy trade has played
Russia already pumps gas to China via the a main role in this shift. While the EU is still Rus-
WHAT NEXT: Power of Siberia pipeline, which was opened sia’s top export market, China is in second place,
Analysts are hopeful that in late 2019. These supplies are sent under a with its imports totalling $79.3bn in value in
another, larger contract $400bn deal the two countries reached in 2014, 2021, according to the Chinese customs agency.
could be reached within not long after ties between Russia and the West Oil and gas accounted for $44.6n of this sum.
the next 12 months. collapsed following Moscow’s annexation of Russia has jostled in recent years with Saudi
Crimea. Arabia for the position of China’s biggest oil
While Power of Siberia is filled with gas from supplier. Last year, it delivered 1.59mn barrels
onshore fields in Eastern Siberia, the latest con- per day (bpd) of crude, accounting for 15.5%
tract is for supplies from the South-Kirinskoye of Chinese imports. These supplies are sent via
field off the east coast of Sakhalin Island. the Eastern Siberia Pacific Ocean (ESPO). Chi-
The deal was signed on the same day as Rus- nese investors also have a position in Russia’s
sian President Vladimir Putin’s arrival in Beijing upstream, LNG and petrochemicals sectors,

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