Russia becomes China's top source of crude oil imports in 2023, with Russian gas exports to China increasing by 61.7% compared to 2022.
However, China appears to be in no hurry with the Power of Siberia 2 gas pipeline . One of the main reasons for this delay may be concerns about gas prices, according to SCMP.
When Russia separated from the European market, China bought gas at better prices. However, energy cooperation with China does not help Russia compensate for lost revenue from the European market.
In 2023, Russia will only export 28.3 billion m3 of gas to Europe, a small number compared to the 192 billion m3 that Gazprom alone sold to European countries in 2019.
In 2023, China will buy 22.7 billion m3 of Russian gas at a price of 286.9 USD/1,000 m3. Previously, the price that Russia sold gas to European countries was 461.3 USD/1,000m3.
SCMP said that China is taking advantage of discounted prices with Russian gas, and is actively looking for ways to get even lower prices. Much information shows that Beijing plans to buy Russian gas at a price close to the domestic selling price in Russia, about 84 USD/1,000 m3.
More noteworthy, China is likely to only commit to buying a small portion of the Power of Siberia 2 pipeline's expected annual capacity of 50 billion cubic meters.
On the Russian side, at least currently, it seems not ready to make too many concessions, so the realization of the Power of Siberia 2 project is still uncertain, also according to SCMP.
Besides, there are still doubts about whether China really needs another Russian gas pipeline if the country is completely satisfied with the amount of gas it receives through the existing Power of Siberia pipeline.
But China's gas imports could reach 300 billion cubic meters per year by 2040, and China's existing gas contracts with Russia and other suppliers do not yet meet this target. Therefore, China may finally reach an agreement with Moscow on the Power of Siberia 2 pipeline.
SCMP writer Nikola Mikovic points out that even if China does not achieve its ambitious plans related to the transition from fossil fuels to renewable energy, it is unlikely that the pipeline will Siberia 2 gas will become the country's top energy priority.
Meanwhile, Russian energy giant Gazprom reported its first loss in more than 20 years after losing the European market. "Russia seems to need the Chinese market more than China needs Russian gas" - Nikola Mikovic noted.
For Russia, the Power of Siberia 2 project may become financially unviable. In the context of the conflict in Ukraine, Western sanctions and a loss-making energy giant, it is difficult for Russia to finance the construction of a 2,600 km long pipeline worth billions of dollars passing through Russia, Mongolia and China.
Therefore, if Russia continues to reduce the price of gas sold to China and offer more concessions, it is highly unlikely that the country will benefit from the Power of Siberia 2 gas pipeline if the project ultimately goes ahead. conducted.
