Moscow’s ‘gas turn’ to China, a challenge to Europe

Moscow’s ‘gas turn’ to China, a challenge to Europe. Russia’s major state-owned energy company Gazprom is set to finalize an agreement in 2022 for a second major gas pipeline project to link natural gas from Siberia to China. Energy analysts and Western diplomats say it is another stage in Moscow’s fast-moving gas turn to Asia.

They see the turn as a geopolitical project that could mean more trouble for Europe.

This large-diameter pipeline, called “Force of Siberia 2,” through Mongolia, will be able to transport 50 billion cubic meters of Russian natural gas to China every year. Russian President Vladimir Putin gave the project the go-ahead in March. When completed, the project will complement another project “Power of Siberia 1”. “Power of Siberia 1” transports natural gas from the Chayankinskoye oil and gas field in Yakutia in eastern Siberia, Russia, to northern China.

Moscow’s ‘gas turn’ to China, a challenge to Europe

Power of Siberia 2 will supply China with natural gas from Siberia’s Yamal peninsula, which is also the source of Russian gas exports to Europe. Western officials fear the project could have serious geopolitical ramifications for energy-starved European countries before they actually begin their long transition from fossil fuels to renewables.

For months, Western leaders and officials have accused Russia of exacerbating Europe’s energy crisis this year, which could deepen as the northern hemisphere experiences winter. Gazprom is shrugging off European requests for more gas supplies. Industry monitors say Gazprom has at times even cut back on exports in the past few weeks.

The energy giant insists they meet the contracted gas supply, but the International Energy Agency and European lawmakers have accused Gazprom of deliberately not doing enough to increase supplies at a time when Europe faces a difficult situation. Europe is experiencing an unprecedented surge in energy prices, raising the risk of energy rationing and factory shutdowns.

The new energy project between China and Russia, discussed by Putin and Chinese President Xi Jinping in a video conference on Dec. 18, said Filip Medunic, an analyst at the European Council on Foreign Relations, said. , will give Moscow more leverage in price negotiations with Europe and promote China as an alternative market for Russian gas.

He said in a research note earlier this year: “Russia remains Europe’s main supplier of natural gas, but Europe urgently needs to understand the changes Russia is making to its energy transport infrastructure – changes that may even make Europe more At the mercy of Moscow.”

The Russian president told reporters after a video conference with Xi that the route, length and other parameters of the Power of Siberia 2 pipeline had been agreed and that a feasibility report would be completed in the coming weeks.

Vita Spivak, energy analyst at global consultancy Control Risks, said the Kremlin has been keen to expand its energy market in China, and as the country gradually expands over the next few years. With less coal use, demand for natural gas as an alternative energy source will increase. He told a forum earlier this month that Kremlin officials were eager to “take advantage of this opportunity,” especially “given the good cooperation between the two countries.”

She said that the “Force of Siberia 2” has been led by Putin.

Strategic management consulting firm McKinsey expects China’s demand for natural gas to double by 2035. This is a godsend for Russia. European governments have drawn up plans for how to transform energy markets – how to produce, import and distribute energy, how to switch to renewable energy and, in some cases, nuclear energy. At a time when Europe is slowly weaning itself off of Gazprom supplies, Russia needs to diversify into Asia in order to prolong its time to profit from its rich natural gas resources.

But energy and national security analysts say Europe will remain dependent on Russian gas for the foreseeable future, with Moscow busy redeploying its intricate pipelines to serve its broader economic and political purposes. Currently, Russia supplies gas to Europe through several pipelines, including Nord Stream 1, Turk Stream, and a pipeline from Yamal to Germany via Belarus and Poland.

Russia has also just completed the controversial Nord Stream 2 underwater pipeline, which runs from Russia to Germany via the Baltic Sea, bypassing the traditional overland route through Ukraine. Nord Stream 2 has yet to receive final approval from German authorities.

Washington has been warning about the risks of Nord Stream 2, saying the pipeline would make the EU more dependent on Russia for its energy needs in the short term and could make the EU more vulnerable to economic coercion from the Kremlin. The planned Power of Siberia 2, capable of delivering the same volume of gas to China as Nord Stream 2 to Europe, would give the Kremlin more options in deciding on buyers and prices.

Gazprom’s refusal to supply Europe with more gas during the current energy crisis has “indicated Russia’s dubious motivation to be ready to use the energy market to achieve pure “As Russia diversifies into China, the Kremlin will have more opportunities to close and open supplies to Europe, while significantly reducing the financial risk to Russia. “

Sunbal Razzaq

Sunbal Razzaq is the founder & CEO of Sunshine Tips.

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