Russia's New 6,700 Km Gas Pipeline To China Proof Of Trump's Tariff Sanctions

Illustration of the land gas pipeline. (Unsplash-Mike Benna)

JAKARTA - The head of Russia's state-owned gas company, Gazprom, said that his party had reached an agreement to build a gas pipeline to China. However, details of this agreement have not yet been announced to the public.

On paper, the project called Power of Siberia 2 will give Russia a way to compensate for some of its decades-long natural gas sales to Europe for the impact of war with Ukraine.

Citing AP, Thursday 11 September, the Pipe will drain Russian gas from reserves in western Siberia via Mongolia to China.

However, Gazprom CEO Alexei Miller said the agreement his party built represented Russia with China National Petroleum Co. regarding this project has been "legally binding". This could underscore Russia-China relations that are getting closer compared to the United States (US).

Russia's new gas pipeline to China

This pipeline will stretch for 6,700 kilometers (km) (4,163 miles) from a gas field on the Yamal Peninsula in western Siberia, past the Baikal Lake in eastern Siberia, then across Mongolia to China. For more than 50 years, Russia has made a big profit by sending Yamal gas to Europe via pipelines leading west.

However, Russia cut off most gas pipelines to Europe due to the war in Ukraine, and the European Union wants to end the remaining supply by 2027.

So, this new pipeline will be Russia's way of shifting gas sales to Europe that has been stopped to big new customers.

Geopolitical Agreement

Power of Siberia 2 will distribute 50 billion cubic meters to China per year. Meanwhile, quotas to Europe, which are currently disbursed, amounting to 180 billion cubic meters per year. This means the new gas pipeline project to China could close part of business losses.

This pipeline will complement previous smaller Power of Siberia lines, which channel gas from various fields in eastern Siberia with a capacity of 38 billion cubic meters per year.

Financing

So far it is not clear who is financing the new Russian gas pipeline project to China. There is no agreement on gas prices or even who will finance the construction of the pipeline even though the meeting between Russian President Vladimir Putin and Chinese President Xi Jinping recently.

Russia remains a supply of natural resources to India

India continues to buy Russian oil even though US President Donald Trump retaliates with an import rate of 25 percent.

On the one hand, China's trade dispute with the Trump Administration has temporarily blocked the purchase of the US against China's liquefied natural gas.

Meanwhile, China has begun receiving LNG shipments from Russia's Arctic-2 terminal, which has been targeted by US and European Union sanctions.

There was a Russian, Indian, Chinese show that said, "You know, we don't care about your sanctions, we don't care about your LNG," said the Chinese energy research team at Oxford Institute of Energy Studies.