Since the onset of the Ukrainian conflict, Russia, a major global oil producer, has solidified its energy partnership with China, the world’s second-largest oil consumer, trailing only behind the United States.
Beijing, in the face of Western criticism regarding its growing alliance with Moscow amid Russia’s Ukraine conflict, asserts that these connections adhere to international norms.
China maintains that it has the prerogative to collaborate with any nation it chooses.
According to China’s customs data, the year-on-year growth of China’s exports and imports with Russia accelerated in September compared to August.
Bilateral trade reached an impressive $21.18 billion last month, marking the highest level since February 2022 when Russia initiated its military operation in Ukraine.
Chinese Commerce Minister Wang Wentao recently emphasized that economic and trade cooperation between China and Russia had deepened and strengthened under the “strategic guidance” of their two leaders.
Here are some noteworthy energy projects and developments in their partnership:
- Russia currently exports approximately 2.0 million barrels of oil per day to China, constituting more than a third of its total crude oil exports. China stands as Russia’s second-largest buyer of Russian oil after India.
- Roughly 40% of these supplies flow through the 4,070-km (2,540-mile) East Siberia Pacific Ocean (ESPO) pipeline, financed by Chinese loans totaling around $50 billion.
- From January to September, Russia supplied 1.3 million barrels per day (bpd) of seaborne crude, while China also imported about 800,000 bpd of ESPO crude via pipeline.
- China has saved $4.34 billion this year by importing Russian oil.
- Russian pipeline natural gas exports to the European Union are projected to decline to 21 billion cubic meters (bcm) this year, a significant drop from previous years.
- In contrast, Russia is expected to supply 22 bcm to China via the Power of Siberia pipeline this year, surpassing its gas exports to Europe for the first time.
- The Power of Siberia pipeline began supplying gas to China in 2019 and is set to increase to 38 bcm annually by 2025 under a $400 billion, 30-year contract.
- Russia is planning to construct a second gas pipeline to China, Power of Siberia 2, with a capacity of 50 bcm per year.
- Russia secured a 30-year contract to supply 10 billion cubic meters of gas annually to China from the Russian island of Sakhalin during President Vladimir Putin’s visit to China last year.
Moreover, Russia’s Novatek aims to become the world’s largest liquefied natural gas (LNG) producer, with investments from Chinese firms, including CNPC, in its Yamal LNG and Arctic LNG-2 projects.
Russia may also supply up to 10 million tons of LNG to China this year out of a total of 33 million tons produced in Russia.
In summary, Russia and China have strengthened their energy ties significantly, with expanding trade and substantial investments in oil and gas projects, marking a notable shift in global energy dynamics.