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Russia Signs Sakhalin Pipeline Deal To Supply China

Despite Western media Gazprom rhetoric, Russia Is To Become China’s Largest LNG Supplier

Just a month after Western media took aim at Russia for not being able to reach agreement with China on increased gas supplies, Russia has announced that supplies of Russian gas to China via the Far Eastern route will start in 2027.

Western media reports of China’s alleged rebuffing of Russian gas are numerous but primary examples can be seen here, here, here, and here

Many have also talked up the damage done to Gazprom’s business including allegations the company may never recover – see here, here, here and here.

Readers can make up their own opinions on the accuracy of Western media reporting on the issue, as Gazprom CEO Aleksey Miller made the announcement of increased Russian gas sales to China on Friday (June 28).

The Far Eastern route will deliver supplies of Russian natural gas from the shelf off Sakhalin Island to China. Moscow and Beijing had actually sealed an agreement for additional pipeline gas deliveries this route in February 2023.

According to Miller, the Far Eastern route will have an annual capacity of 10 billion cubic meters (bcm) once fully operational. The project involves the construction of a cross-border section across the Ussuri River between the already operational Russian pipeline and the Chinese city of Hulin.

Miller said that “With the Power of Siberia and the Far Eastern route reaching full capacity, Russia will become the largest gas supplier to China.”

Russia currently supplies gas to China via the Power of Siberia pipeline, a section of the so-called Eastern Route, under a bilateral 30-year agreement. Deliveries started in 2019, and the pipeline is expected to reach its full operational capacity of 38 bcm of natural gas annually next year, according to Miller.

Gazprom has been systematically boosting gas exports to China via the pipeline, he elaborated.

Moscow and Beijing are also nearing a deal on the construction of a mega gas pipeline known as the Power of Siberia 2. It will transport up to 50 bcm of gas annually from the Yamal Region in northern Russia to China via Mongolia.

Once all the pipelines are fully operational, the volume of Russian gas supplies to China could reach nearly 100 bcm annually.

“Russian gas is in demand in China,” Miller said on Friday, adding that in 2023 supplies exceeded contractual obligations by 700 million cubic meters. “At the beginning of this year, we continued to break records for daily exports to Chinese consumers.”

Natural gas consumption in China is projected to double by the middle of this century.

Further Reading

Gazprom Starts Connecting Strategic Asian Gas Pipelines
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