The oil that Europe does not want is exported to India, China and Turkey by Russia to the east. However, for the 188.6 billion cubic meters of natural gas that Europe does not want, Russia cannot count on India and Turkey, but can only count on China to "take over", because India and Turkey have limited demand for natural gas, while China has a large demand.
Russian Deputy Prime Minister Novak in charge of energy recently said that Russia could export 100 billion cubic meters of natural gas to China every year after the completion and operation of the Siberian Force 2 natural gas pipeline. Russian experts have a greater appetite and hope that Russian natural gas will account for 30% of China's imported natural gas market.
That is to say, Russia hopes that China will buy all or most of the natural gas that Europe does not want. Of course, China is also willing to import more Russian natural gas. Before the outbreak of the Russia Ukraine war, China was particularly interested in the Siberian Force 1 and 2 natural gas pipelines and expected to negotiate, build and operate with Russia as soon as possible. However, with Europe as the largest buyer, Russia was not enthusiastic about this and slowly swallowed the land. It took many years to complete the Siberian Force 1 natural gas pipeline, while the pipeline 2 project is still in the plan.
Last year, the EU imposed sanctions on Russian natural gas, and Europe led by Germany resolutely decoupled from Russian natural gas, thus getting rid of its energy dependence on Russia and abolishing Russia's "energy weapons" against Europe.
According to the World Energy Statistical Yearbook (2022), in 2021, Russia will export 167 billion cubic meters of pipeline natural gas to Europe, and export about 21.6 billion cubic meters of liquefied natural gas (LNG), a total of 188.6 billion cubic meters.
Europe is the largest buyer of natural gas and oil in Russia. Because of the war between Russia and Ukraine, Europe resolutely decouples from Russia's oil and natural gas, which is a disaster for Russia, which depends on energy exports to earn foreign exchange. Russia must do everything possible to find the "receiver", otherwise, Russia's finance will collapse. Forced by the situation, Russia's economy and energy exports are turning to the east at full speed.
The so-called "turning east" means that Europe will not buy Russian natural gas and oil. Russia can only find China, India and Turkey in Asia to import Russian natural gas and oil in large quantities. Turkey's economy is too small, and what Russia can really expect is actually China and Britain.
In terms of oil, India has a large demand. As Russia gives India more discounts than any other country, India buys a large amount of Russian oil. Russia not only becomes India's largest oil supplier, but also overtook China in the first two months of this year, becoming the number one buyer of Russian oil.
However, India's demand for natural gas is relatively small. Russia cannot expect India to import a large amount of natural gas. The only thing it can hope for is China. China has a large demand for natural gas. According to the data released by the General Administration of Customs, in 2022, China's total import of natural gas will be about 109.25 million tons (about 151.9 billion cubic meters), down 9.9% year on year; The import amount totaled 468.287 billion yuan, up 30.3% year on year. In 2021, China's natural gas import volume will be 168 billion cubic meters.
That is to say, China's natural gas import volume is close to Russia's total natural gas exports to Europe in 2021 (188.6 billion cubic meters). With the recovery of China's economy in 2023, the demand for natural gas will also rise, which is estimated to be equal to Russia's exports to Europe in 2021. As a major exporter of natural gas, Russia is very clear about this.
Russia's plan is to sell most of the 188.6 billion cubic meters of natural gas abandoned by Europe to China. The first step of Russia's plan is to sell 55 billion cubic meters/year of natural gas originally exported to Europe through Beixi No. 1 and No. 2 natural gas pipelines to China through the Siberian Power No. 2 pipeline.
The natural gas transported by Beixi No.1 and No.2 pipelines and Siberian Power No.2 pipeline all use the same oil fields in West Siberia, while the transportation volume of Siberian Power No.2 natural gas pipeline is 50 billion cubic meters per year, close to the total transportation volume of Beixi No.1 and No.2 pipelines (55 billion cubic meters per year).
Russia's second step plan is to significantly expand the export of pipeline natural gas and liquefied natural gas to China. On March 22, Russian Deputy Prime Minister Novak said in the "Russia 24" television program that Russia is expected to deliver 22 billion cubic meters of natural gas to China through the Siberian power pipeline in 2023. At the same time, Russia plans to supply 50 billion cubic meters of natural gas to China every year through the Siberian Force 2 natural gas pipeline. Plus the export of LNG to China, the quantity will be more.
Russian Deputy Prime Minister Novak said: "These channels together can enable Russia to supply about 100 billion cubic meters of natural gas to China every year." This means that half of the 188.6 billion cubic meters of Russian natural gas abandoned by Europe is consumed by China, which is of great significance to Russia.
In fact, Russia's expectations are far more than that. Amirajiyan, head of economic research in the field of fuel energy complex of the Russian Strategic Research Center, told the Russian satellite news agency on March 25 that in the next 10-15 years, the share of Russian natural gas in China's imported natural gas market will probably reach 30%, and if liquefied natural gas is included, the share will be higher.
Russian natural gas accounts for 30% or more of China's natural gas imports, which is a double-edged sword for China. The good thing is that China's natural gas import sources are more stable, the bad thing is that China has a high dependence on Russian natural gas. If Russia wants to find trouble with China, it will "weaponize" natural gas to hit China
It is precisely because Russia "weaponized" the energy and knocked European countries, which forced European countries to resolve to decouple from Russian energy regardless of the cost, and import natural gas and oil from other countries. Before the outbreak of the Russia Ukraine war, the relationship between Russia and Germany was far more intimate and iron than that between Russia and China!
Don't be naive to think that Russia will not do anything to China that it has done to Germany and Europe. Even Turkmenistan, once the largest supplier of pipeline natural gas, dares to "weaponize" natural gas to hit China. A few years ago, Turkmenistan unilaterally suspended the supply of natural gas to China on the ground of pipeline maintenance, As a result, many natural gas users in the north are unable to cook and heat, and suffer unspeakably in the cold winter! One cannot ignore the lessons learned from the past.
Therefore, it is impossible for China to put eggs in one basket for the import of natural gas, oil, coal, agricultural products, timber and other commodities. Many years ago, China has established a fairly complete system of diversified supply sources, and will not be highly dependent on a certain country - even the source of iron ore imports, We have also completed the initial diversification of supply sources, not to mention more alternative products such as oil, natural gas and coal.
After all, there are many countries competing to export oil, natural gas, coal and other products to China. It is impossible for us to increase imports from Russia while abandoning other suppliers in order to make big money for Russia and help Russia tide over difficulties.
The two major considerations for China and Russia to sign the Siberian Power 2 Natural Gas Pipeline Project Agreement are that they will not rely heavily on a single supplier, including Russia, and that they will have realistic preferential prices. Russia should show enough sincerity to solve these two problems together. Then, this long-term natural gas contract will be signed in the near future, In addition, the economic and trade cooperation between China and Russia will reach a higher level to achieve a win-win situation.
