discount

In May, conversations between Moscow and Beijing about the Power of Siberia 2 gas pipeline They hired again. Russia pressed the accelerator to close the deal, but China stopped: it rejected a route through Mongolia and discussed each price and deadline figure. The project, again, was caught in mutual distrust. Meanwhile, in Europe the agenda was another. Brussels He accelerated his strategy to cut the dependence of Russian gas and expand renewables. That movement left Moscow with less margin: without Europe, I needed a buyer in a hurry. And all the roads took to Beijing. A turn in Beijing. The board has moved in September. During the Shanghai Cooperation Organization Summit in Beijing, Vladimir Putin and Xi Jinping announced that they had signed a memorandum to build the Power of Siberia 2. According to Reutersthe document is legally binding, it is not just a declaration of intentions. The gas pipeline, once completed, will allow transporting 50 BCM of annual gas from the Yamal Arctic deposits to northern China through Mongolia for 30 years. However, As Wall Street Journal saidthe essential points have not been closed: price, financing and construction calendar. Beijing, who has never been in a hurry, thus keeps the pan for the handle. But something begins to move. Although the big project has no date, something began to change. Reuters reported that Gazprom and the CNPC closed an immediate increase in current shipments: the Power of Siberia 1 will pass from 38 to 44 BCM per year, and the Sakhalin gas pipeline will rise from 10 to 12 BCM. Returning to the Power of Siberia 2 gas pipeline. So far what is known is that it will depart from the Russian Arctic deposits – the same ones that were supplied to Europe – and will travel Siberia to Mongolia, before reaching northern China. Its capacity: 50 BCM per year, equivalent to almost a third of everything Russia sold to Europe before the invasion of Ukraine. According to Financial Timesthe infrastructure could come into operation in the early 2030s, although the agreement does not specify dates. There is much at stake. The Power of Siberia 2 is not just a bilateral agreement: it can reorder the dynamics of the world gas market. As Financial Times explainedits entry into operation of the gas pipeline would withdraw 50,000 million cubic meters of demand for liquefied natural gas (LNG) of the international market. That absence will weigh on investment plans in new export plants, especially in the United States, but also in Qatar and Australia. “For those who are about to make final investment decisions, this announcement is disturbing,” Anne-Sophie Corbeau, a researcher at the Center on Global Energy Piss in Columbia, said for the British environment. China reinforces its energy security. In this context, the biggest beneficiary is China. This new gas pipeline ensures a supply in a context marked by supply volatility from the Middle East. According to Wall Street JournalBeijing would import around 100 BCM of Russian gas per pipe each year, which would represent approximately 20% of its total consumption. A significant figure, but far from an absolute dependence. A less encouraging panorama for Moscow. As Reuters recalledRussia went from exporting 177 BCM of gas to Europe in 2018-19 to just 31 BCM to China last year. Therefore, with the Power of Siberia 2 you can compensate for part of that volume, but not the income: Gazprom has admitted that the prices for Beijing will be lower than the Europeans, According to Bloomberg. In short, Russia wins a strategic client but loses pricing power; China ensures a stable supply without compromising its maneuvering margin; And the global gas market will have to adjust to a map in which Asia becomes the center of gravity. United States in the mirror. The agreement comes After the Alaska Summit With Donald Trump, in which confrontation with China and Russia was exacerbated. As Bloomberg highlightedthe Power of Siberia 2 memorandum is interpreted as a direct challenge to the global order led by Washington. For Washington, the agreement is a double blow: China could reduce the purchase of American liquefied natural gas, and the Moscow-Pekín alliance is reinforced at a time of maximum tension with the Trump administration. The Summit in Beijing, with Russia, China, India and North Korea on the same board, is interpreted as an cornerstone of an alternative block to the Euro -Ratlantic axis. Chronicle of an announced break. Just a few days ago, Europe announced that it entered September With an unexpected energy mattress: gas deposits are already 76% of their capacity. In addition, within two years, the total cutting of Russian gas dependence by the European Union has been established. In that context, Brussels has set 2027 as the deadline to definitively cut the energy relationship with Moscow. The Power of Siberia 2 symbolizes that rupture: the gas that previously lit heating in Berlin or Paris will now have a destination in Shanghai or Beijing. An unequal relationship. Despite the rhetoric of friendship, the relationship is clearly asymmetric. As explained by Alexander Gabuev, from Carnegie Russia Eurasia Center, cited by WSJChina “has all the letters”: controls the rhythm, price and conditions. Russia, isolated and sanctioned, needs Beijing much more than the other way around. Besides, As Reuters recalledChina advances towards a more electric and renewable model, which in the medium term can reduce its gas dependence. Russia runs the risk of investing billions in a project that the true beneficiary will be the Asian giant. Image | Unspash and Kremlin Xataka | Putin’s not so secret plan to survive without Europe: a giant gas pipeline to China