Putin unveils new gas deal with China’s Xi as Moscow clashes with West

Russia, already Beijing’s third-largest gas supplier, has strengthened its ties with China, the world’s largest energy consumer, reducing its dependence on its traditional European energy customers.

“Our tankers have prepared very good new solutions on hydrocarbon supply to the People’s Republic of China,” Putin said during a meeting with Xi to discuss closer cooperation.

“And a step forward was taken in the gas industry, I mean a new contract on the supply of 10 billion cubic meters (bcm) per year to China from the Russian Far East,” said Putin, who was in Beijing to attend the Winter Olympics.

Putin has accused the United States of stoking tensions over Russia’s neighboring Ukraine, which is seeking NATO membership. More than 100,000 Russian troops have massed near the border with Ukraine. Western countries accuse Moscow of planning an invasion, which it denies.

Russia is Europe’s biggest supplier of natural gas, and Western countries fear that already tight supplies could be cut off in the event of a conflict. However, the new deal with Beijing would not allow Moscow to divert gas otherwise destined for Europe, as it was gas from the Pacific island of Sakhalin, which is not connected to Russia’s European gas pipeline network.

Russian gas giant Gazprom said in a statement that it plans to increase gas exports to China to 48 billion cubic meters per year, including through the newly agreed pipeline which will supply 10 billion cubic meters per year from the Russian Far East.

Under previous plans, Russia aimed to supply China with 38 billion m3 by 2025. The announcement did not say when it would reach the new target of 48 billion m3.

An industry source told Reuters on Friday that Gazprom, which has a monopoly on Russian gas exports via pipeline, had entered into a 30-year contract with China’s CNPC, with the first gas to flow through the new pipeline in two or three years.


Russia now sends gas to China through its Power of Siberia pipeline, which began pumping supplies in 2019, and by shipping liquefied natural gas (LNG). It exported 16.5 billion cubic meters (bcm) of gas to China in 2021, including 10.5 bcm through the Power of Siberia pipeline, a network also separate from the pipelines that carry gas to Europe.

Putin is accompanied by several Russian officials and business leaders, including Igor Sechin, head of oil giant Rosneft. Alexei Miller, the boss of Gazprom is not in the delegation.

Rosneft and CNPC have signed an agreement to supply 100 million tons of oil to China via Kazakhstan for 10 years, the Russian company said, extending the existing agreement.

(Reporting by Vladimir Soldatkin and Oksana Kobzeva in Moscow, additional reporting by Chen Aizhu in Singapore; Editing by Christian Schmollinger and Edmund Blair)

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