Russian President Vladimir Putin and Chinese equivalent Xi Jinping will revisit discussions on the long-delayed Power of Siberia 2 gas pipeline throughout Xis visit to Moscow this week for Victory Day celebrations, Bloomberg reported Wednesday, mentioning individuals acquainted with the matter.Putin initially proposed Power of Siberia 2 to Xi in 2022, a job that would increase Beijings purchases of Russian gas to balance out the loss of European market share following the invasion of Ukraine.
However China has yet to give the task the thumbs-up, insisting that gas supplied via the pipeline must be priced at Russias greatly subsidized domestic rate.China may now want to think about a greater rate, potentially somewhere between the domestic Russian rate and what China presently spends for gas through the original Power of Siberia pipeline, Bloomberg mentioned its anonymous sources as saying.Despite the restored talks, a final agreement is not expected to be signed during Xis visit, sources told Bloomberg.The very first Power of Siberia pipeline came online in 2019 and reached its complete capability of 38 bcm per year by the end of 2023.
The 2nd stage, if completed, would carry gas from Russias Yamal fields previously an essential supply source for Europe along a planned route via Mongolia to China.
Chinese authorities are supposedly pushing for a more direct route that would avoid Mongolia, Bloomberg said.Since the intrusion of Ukraine in 2022, Russia has greatly relied on the Chinese market to make up for its lost exports to Europe.
Before the war, Russia exported over 150 billion cubic meters of gas each year to Europe.But even if all pipelines to China existing and possible were utilized to capacity, they would deliver only 98 bcm annually: 38 bcm from the first Power of Siberia, 50 bcm from the proposed 2nd pipeline and 10 bcm from a Far Eastern route.Russian shipment to Europe and Turkey are anticipated to drop to 40 bcm this year, according to BCS forecasts a reduction of 10 billion from 2024 dueto the end of Russian gas transit through Ukraine.Meanwhile, the European Union is relocating to eliminate Russian energy imports completely.On Tuesday, the European Commission unveiled a long-promised strategy to phase out its remaining gas imports from Russia by the end of 2027.
The strategy wouldrequire energy companies to disclose the information of their Russian gas agreements with energy and security authorities.Gazprom, when the centerpiece of Russias economic impact in Europe, expects to export simply 47 bcm to Europe and Turkey this year five times less than in 2019.
Between 2025 and 2034, the gas giant expects a cumulative budget plan deficiency of 15 trillion rubles ($179 billion at current currency exchange rate).