Gazprom and CNPC signed a range of gas agreements in Beijing, further reinforcing the gas relationship between China and Russia. but there are some caveats…
there are three key deals:
(1) increase deliveries via the Power of Siberia pipeline from 38 bcm/y to 44 bcm/y;
(2) increase deliveries via the Far East pipeline from 10 bcm/y to 12 bcm/y (the pipeline is set to start operations in 2027 and ramp-up through 2030);
(3) a Memorandum of Understanding on the construction of the Power of Siberia 2 pipeline system. This is a 50 bcm/y mega-pipeline project.
While the latter caused quite some excitement, I would be rather cautious.
There are still no gas supply agreement supporting Power of Siberia 2.
And without a legally biding gas supply contract, no one is going to build a 3000 km long, 50 bcm/y pipeline.
Also noting, that Gazprom did not make any official announcement on their website, besides a high-level statement on new the strategic relationship with CNPC.
There is certainly a new momentum for China-Russian gas relations, but let us be cautious on jumping too quickly to conclusions. We have a 20years history of MoUs on Power of Siberia… of course, this time it might be different.
What is your view?
Source: Greg Molnar
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