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If Russia is to succeed in replacing lost oil and gas exports to the West, China will have to be the buyer of much of them, as the pipeline infrastructure to other potential buyers is limited. / bne IntelliNews
Russia's Asian oil and gas pivot will take too long
bne IntelliNews
Russia is looking to fast-track
its pivot to Asia in order to
offset the loss of revenues
that its energy divorce with the EU is bringing about. But according to the International Energy Agency (IEA), in the best-case scenario it would take the country at least a decade to ramp up
gas supplies to Asia to a level close to its 2021 exports to the EU, which amounted to 155bn cubic metres per year. Diverting oil supplies eastwards will be easier, but will similarly take time.
Russia’s mostly Soviet-era gas export pipelines are largely geared to send supplies from large fields in Western Siberia to Europe. Its only other options are expanded LNG exports, primarily from the Arctic, and an expansion in gas trade with China, through the development of the Power of Siberia 2 pipeline, and additional links. The IEA’s scenario assumes that Russia will successfully build and
expand its gas infrastructure. But as
Dr Maria Shagina, at the University of Zurich, notes in a recent article for IISS’ Survival: Global Politics and Strategy, “that would require substantial capital
strategic reserves, but Beijing would be wary of abandoning its careful energy- diversification policy and inordinately relying on Russia.”
“Russia’s mostly Soviet-era gas export pipelines are largely geared to send supplies from large fields in Western Siberia to Europe”
and access to energy technology at a time when sanctions prohibit it.”
“On top of infrastructure bottlenecks and logistical challenges, uncertainty surrounds Asia’s demand and energy security concerns,” Shagina writes. “Russia has become China’s largest
oil supplier, surpassing Saudi Arabia. China has been quietly replenishing its
Russia has already accounted for 18.4% of Chinese oil imports over the past year, even though policymakers in Beijing have informally limited reliance on any one country for more than 15% of the total. Within this frame, China could expand purchases of Russian gas, which still only account for 7% of the overall volume, but Shagina noted that “even optimistic scenarios for Russian
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