May 17, 2024
Russia, China Interested in Expanding Oil, Gas Trade, Putin Says
, Bloomberg News
(Bloomberg) -- Russia and China are interested in increasing their oil and gas trade, President Vladimir Putin told reporters in Harbin on Friday.
“Mutual interest in implementation of such projects has been confirmed,” Putin said in the final hours of his state visit to China, according to a briefing broadcast by state-run Rossiya 24 TV. “We have a huge common border and nothing can interfere: neither sanctions against the tanker fleet, nor sanctions against financial institutions. We will buy and sell everything in national currencies.”
Russia’s relations with western nations, formerly its main energy market, are at the lowest point since the Cold War due to Putin’s invasion of Ukraine. That makes Moscow increasingly reliant on oil and gas deliveries to growing Asian economies. China, the word’s largest energy importer, is currently a key buyer of Russian barrels and Gazprom PJSC’s natural gas.
See also: Putin Visits Xi as US Threatens China Sanctions Over Ties
Russia, which currently delivers gas to China through the Power of Siberia pipeline, plans to build a second supply link along the same route no later than in 2027. Moscow has for years been trying to sign a third gas contract with China, which would pave the way for a third pipeline via a different route through Mongolia, called Power of Siberia 2. If all three lines operate as planned, Russia’s gas flows to China could reach nearly 100 billion cubic meters per year.
So far negotiations for the third link have not been finalized, with the price of gas remaining one of the key obstacles.
The Power of Siberia 2 deal is under discussion, Putin said. Russia may also build another oil conduit alongside the third gas link, he said, the first time he has mentioned such a possibility.
Another supply option would be for Russia to buy tankers internationally and ship hydrocarbons to China via the Northern Sea route through Arctic waters, Putin said. “All options are possible, all are acceptable and economically viable,” he said. “We need to choose the best.”
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