The Asian giant liquefies the gas that comes in by tube at a very cheap price and sells it together with the excess liquefied gas it gets from Moscow in gas tankers.
Vladimir Putin finances the invasion of Ukraine with the export of fossil fuels. Europe has been the main customer, especially natural gas – it supplied 45% of what the continent consumes last year – but political tensions caused by the closure of the Nord Stream 1 gas pipeline and the possibility of sanctions also being imposed are making gas this trade difficult and threaten to end it. So Russia is looking for alternative clients, and China seems the most logical: it is a growing giant that needs energy and that it does not condemn or punish Russia’s ‘special military operation’.
The relationship has been consolidated and is approaching its current operational maximum. In the first half of the year, China increased the volume of gas imported from Russia by 63.4%, the value of which has tripled to USD 2,390 million. All this despite the fact that there is only one gas pipeline between the two powers: the Power of Siberia, inaugurated in December 2019 with a capacity of 38,000 million cubic meters (38 bcm) per year. That volume will be reached in 2025 thanks to the connection it plans to open on October 25 through a new connector in Eastern Siberia, but this year the gas pipeline is expected to supply only 16 bcm.
Adding to this plan is the commitment made a few days ago between the presidents of Russia, China and Mongolia to build the Power of Siberia 2, with a capacity of 50 bcm, which would serve to store some of the gas. mined from Yamal to lead China. , in western Siberia, and which currently supplies Europe through Nord Stream 1. If forecasts are correct, Russia could send China more than 100 bcm of natural gas by 2030, two-thirds of the 155 bcm it sold to Europe last year.
However, several experts argue that, despite being a net importer of this fuel, China does not need that much volume. And that explains the business he does. Because everything indicates that part of this increase in Russian gas imports, which has been bought at a bargain price due to the current situation, ends up in other countries that put much more in their pockets. It is not without reason that China exported liquefied gas (LNG) worth USD 448 million between January and August 2022. That is 64 times more than in 2021 and, according to Chinese customs data, 164 million were destined for European countries, including Spain. Thanks to its regasification capacity and space for large gas tankers, the Port of Bilbao is the infrastructure of the country that unloads the most LNG and the third country in the world to receive the most from Russia.
China has regasification plants in the northeast of the country, where Siberia’s power ends, and can divert the extra gas it buys from Russia in liquid form or cool the gas that arrives in gaseous form to make it liquid. This makes it impossible for the destination country to know the origin of the fuel, as it can also be mixed with the fuel coming from Qatar. In this way, Chinese companies have sold at least 4 million tons of LNG abroad so far this year, which is equivalent to 7% of what Europe consumes. Only the Jovo group admits to selling $100 million to a European customer and Sinopec has sent at least 45 gas tankers.
“So it’s China, not Russia, that gets the extra profit from gas resale,” Anna Mikulska, of the Center for Energy Studies at Rice University, explained to the German chain Deutsche Welle, referring to the fact that China charges for its gas. gas about double what it pays for it. “And Europe can do nothing but stop purchases from China, which could lead to serious supply shortages in the winter,” Mikulska added.
Source: La Verdad