Russia is expanding its gas pipeline to China, and the United States received its first Venezuelan oil exports in four years. Meanwhile, a hastily built terminal in Germany accepted its first shipment of U.S. gas. The Ukraine war has reshaped the global energy map, forcing Moscow to look east as Europe increasingly refuses its exports, and Washington to revive troubled relations with Caracas. Still, this energy diplomacy may have a short shelf life. Given China’s rapid investment in renewable energy, and the years-long build time of new gas pipelines, it may be that Moscow’s investment doesn’t pay off for long.
Russia has increased the export capacity of its pipeline to China to over 60 million cubic meters daily, China Media Group has reported, with total flows this year seen at over 22 billion cubic meters.
That would compare with 15 billion cubic meters delivered via the Power of Siberia last year, and a total of 30 billion since the launch of the pipeline three years ago.
"Gazprom keeps increasing gas exports to China via the Power of Siberia gas pipeline. In 2022, gas supplies regularly exceeded daily contracted amounts based on China’s request. As a result, we exceeded our yearly obligations,” Gazprom’s chief executive Alexei Miller said in a company statement at the end of 2022.
China has become a more or less first-priority destination for the Russian state gas major after the breakup with Europe but in fairness, it had been a priority for years before that as Russia turned east for new markets amid worsening relations with the West.
The Power of Siberia was one of the biggest projects recently completed by Gazprom and the first conduit for Russian gas to China. Now, there’s talk about Power of Siberia 2, which Deputy Prime Minister Alexander Novak said last year will serve as a sort of replacement for the defunct Nord Stream 2 in Gazprom’s export growth strategy.
Indeed, when the Power of Siberia 2 is built, the total capacity of the new pipeline will top 50 billion cubic meters - almost as much as the 55 billion cubic meters in capacity that Nord Stream 2 has. Construction work on the new pipeline is scheduled to begin in 2024.
Meanwhile, last year Gazprom’s gas exports were set to fall by about 50 billion cubic meters, again per Novak. Speaking to the media in September, the Deputy Prime Minister also said plans are to boost gas exports to China to more than 61 billion cubic meters by 2025.
