Russia needs China’s market more than China needs Russian gas

It is no secret that China is taking advantage of Russia’s “energy decoupling” from Europe to get better prices for Russian gas. The European Union has found ways to significantly reduce its gas imports from Russia. However, energy cooperation with China has not allowed Russia to fully make up for the loss of the European market.

In 2023, Russia exported only 28.3 billion cubic metres of natural gas to Europe, which is a drop in the ocean compared to the 192 billion cubic metres that Gazprom alone sold to European countries in 2019.

In 2023, China bought 22.7 billion cubic metres of Russian natural gas, and was paying US$286.9 for 1,000 cubic metres of gas. The Kremlin charged much more for European countries, selling natural gas at US$461.3 for 1,000 cubic metres.

But even though China eagerly takes advantage of significant discounts on Russian gas, it reportedly seeks to secure even lower rates. Reports suggest that Beijing expects to pay at rates close to Russia’s heavily subsidised domestic prices, around US$84 for 1,000 cubic metres. More importantly, China will allegedly commit to buying only a small fraction of the Power of Siberia 2 pipeline’s planned annual capacity of 50 billion cubic metres of gas.

Since the Kremlin, at least for now, does not seem ready to make such huge concessions to its strategic partner, the realisation of the Power of Siberia 2 project remains uncertain. Also, it is questionable whether China even needs another pipeline that would supply it with Russian natural gas, if it is perfectly satisfied with the volume of gas it gets through the already existing Power of Siberia.

According to energy experts, China’s natural gas imports will amount to 250 billion cubic metres by 2030, which can almost