Abandoning traditional energy supply partners, the CCP bet on Russian gas

Translated by: MOS Information Team – BlueAngel

On January 8, RT TV reported that due to the ongoing trade dispute with Australia, energy-poor China is seeking to increase its purchases of natural gas from Russia, which may put supply deliveries in Australia, China’s number one gas supplier, at risk.

As the world’s largest natural gas consumer, the CCP relies heavily on imported energy. According to the General Administration of Customs, in 2020, 43% of China’s natural gas consumption will depend on imports, including 89 billion cubic meters of liquid natural gas (LNG) and 46 billion cubic meters of pipeline natural gas.

An employee checks a gas valve at the Atamanskaya compressor station, part of Gazprom’s Power Of Siberia gas pipeline to China.   © Reuters

According to Refinitiv’s financial data, Australia was the largest supplier of natural gas to China in the first nine months of last year, followed by the United States. But relations between the two countries and Beijing have continued to decline in recent years, and Russia will partially meet China’s huge natural gas needs and diversified import needs.

In recent years, trade and diplomatic tensions between China and Australia have intensified. Particularly due to Australia banning Chinese telecom operators from participating in the construction of local 5G networks, and by responding to the United States’ call for an international investigation into Beijing’s role in the coronavirus outbreak, the relationship between the two countries has been exacerbated. As a result, Beijing hit back with high tariffs on Australian wine, while China’s imports of Australian coal fell by a staggering 89.7% year-on-year from January to November 2021. Not to be outdone, the Australian government retaliated against China’s Belt and Road Initiative, leaving two Chinese projects in Victoria stillborn.

Gazprom is currently transported directly to China from the Far East Yakutia via Gazprom’s Siberian pipeline. The Siberian Force II pipeline, which operates for the first time since December 2019, is expected to deliver 50 billion cubic meters of natural gas to northern China every year.

Henning Gloystein, head of energy at Eurasia Group, said: “Just as Europe uses liquid natural gas as a political chip, China also uses Russian pipelines as its political chip and backup. China is highly dependent on natural gas, mostly imported from Australia and the United States, but its international relations have deteriorated in recent years.”

At present, the Dispute between China and Australia has not yet extended to liquefied natural gas and iron ore. However, according to the data tracking analysis provided by oilchem.net, in 2021, Australia has not renewed its long-term supply contract with the Chinese side, and some of its market shares have been eroded by Qatar, Russia, and the United States.

Source: https://gnews.org/zh-hans/1839568/

Proofread by: Lightyear                                       

Edited by: Lightyear

Posted by: Lightyear

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