Page 8 - AsianOil Week 12 2023

AsianOil PIPELINES & TRANSPORT AsianOil

Putin says Russia ready to increase

oil and gas supplies to China

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

P8 www. NEWSBASE .com Week 12 24•March•2023