Putin and Xi show unity, but the pipeline can wait a little longer
At yet another summit in Beijing, just a week after Donald Trump's visit, the Russian and Chinese presidents discussed strategic cooperation, calling US policy "irresponsible”. But once more, negotiations have stalled regarding the Power of Siberia-2 pipeline, which is vital for Moscow but not China.
Beijing (AsiaNews/Agencies) – Not even the energy crisis triggered by the Gulf conflict has managed to break the stalemate over the Power of Siberia-2 project.
Russian President Vladimir Putin's fifth visit to China since the start in 2022 of the war with Ukraine ended without a final agreement on Moscow's ambitious project, which has been under discussion for over a decade.
The project by Russian state giant Gazprom, which would run through Mongolia, is meant to divert gas that Europe no longer buys from Russia to China.
With the usual fanfare in the same halls where the summit with Donald Trump took place just a week ago, Xi Jinping greeted Putin who arrived in Beijing accompanied by a large delegation, composed of eight ministers, five deputy prime ministers, and the heads of major Russian energy companies, including Gazprom and Rosneft.
None of the 40 bilateral documents signed during the summit include specific references to a new pipeline or further energy deals.
The Power of Siberia-2 pipeline is expected to carry up to 100 billion cubic metres of Russian gas per year to China, helping Moscow offset losses caused by sanctions and reduced exports following the invasion of Ukraine.
The main obstacle remains the price of gas. According to the Financial Times, Beijing would like to purchase gas at prices similar to Russia's heavily subsidised domestic prices, which are around per 1,000 cubic metres.
This is far lower than the approximately US$ 258 China currently pays and a far cry from the approximately US$ 420 Gazprom charges other foreign customers.
Chinese authorities are also reportedly reluctant to drastically increase gas imports, believing that Chinese domestic demand may have already peaked. This belief further reduces the chances of a quick agreement.
Kremlin spokesman Dmitry Peskov today attempted to downplay the situation, stating that the pipeline route and key parameters have already been agreed upon and that only a few technical and commercial details remain to be finalised. However, he did admit that there is still no precise timeline for the project's launch.
China currently purchases approximately 38 billion cubic metres of Russian gas per year, which represents about half of Gazprom's remaining long-distance exports.
The Russian government wants to increase the volume by 47 per cent, to 56 billion cubic metres by the end of the decade, combining the new line with the existing Power of Siberia-1" pipeline.
The lack of agreement contrasts with the highly ambitious tone of the summit between Putin and Xi. The two leaders signed a joint declaration on the creation of a "multipolar world" and a "new model of international relations," emphasising the strategic cooperation between the two countries.
They also condemned US President Donald Trump's plans for a "Golden Dome" missile defence shield and described Washington's nuclear policy as “irresponsible”.
Yet, despite political and diplomatic niceties, the lack of a final energy contract highlights the real limitations of Moscow’s economic turn to Beijing, which now dictates the terms of their relationship to Russia.
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22/03/2023 14:05
