Page 150 - RusRPTApr23

9.1.1b Oil sector news
Russian President Vladimir Putin said that Russia is ready to increase oil supplies to China, its key energy partner, following a meeting with Chinese President Xi Jinping in Moscow on March 20-21.
"Russia is prepared to increase uninterrupted oil supplies to support development of the Chinese economy," Putin said, after a meeting with Chinese President Xi Jinping in Moscow.
Russia has been increasing its oil deliveries to China since the invasion of Ukraine, with a record high of 2.01mn barrels per day (b/d) in February, according to China's General Administration of Customs data released March 20. However, analysts believe that despite increasing shipments via its Far Eastern port of Kozmino in 2022, infrastructure limitations, such as existing export capacity, could limit Russia's ability to increase supplies further. Russia supplies 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, which runs through Russian territorial waters in the Arctic, is among future plans to expand energy cooperation between the two countries. It has shorter delivery times and lower costs than traditional routes, with less geopolitical risk.
Chinese importers have benefited from discounts on Russian crude, with the cost of Russian crude imports averaging $73.53 per barrel in February, a 13.7% drop from $85.23 per barrel in the same month the previous year. In comparison, cargoes from Saudi Arabia averaged $83.15 per barrel in February, reports S&P Global.
Gas to grow too Russia began supplying gas to China via the Power of Siberia pipeline at the end of 2019. Supplies have increased to 15.4bn cubic metres (bcm) in 2022, with expectations to reach 22 bcm this year and 38 Bcm per year in 2027.
As second pipeline is planned to come online in 2030. Almost all details of the Power of Siberia 2 gas pipeline, which has a planned capacity of 50 bcm per year and will run through Mongolia, have also been agreed with China, says Putin. Putin said that by 2030, Russia will supply China with at least 98 Bcm of gas and 100mn metric tonnes of liquefied natural gas (LNG).
On March 20, Gazprom reported that its gas exports to China via the route hit a new daily record, following a request for additional gas from China's CNPC.
The global oil market is caught in the cross currents of supply outstripping demand at the moment – but with the prospect of the market
150 RUSSIA Country Report Russia April 2023 www.intellinews.com