China, Russia anticipate more channels to further enhance energy cooperation

When meeting with visiting Russian President Vladimir Putin in Beijing on May 16, Chinese President Xi Jinping said China and Russia have been steadily advancing cooperation in various fields, including trade, investment and energy.

Energy collaboration has been a focal point between the two countries for years, with discussions in this regard first launched in early 2000s.

Despite the constantly changing global landscape, China-Russia cooperation in natural gas has remained stable in recent years. Russia has long viewed China as an important market for its energy exports, with both sides continuously deepening cooperation in recent years.

Currently, China receives natural gas supply from Russia primarily via the Power of Siberia pipeline, which officially commenced operation in December, 2019.

Over the past few years, the gas flow through the pipeline has been increasing, with around 15.5 billion cubic meters of natural gas delivered to China in 2022.

At the end of 2022, Russian President Vladimir Putin witnessed the complete connection of the gas pipeline within Russia, stating that the project would drive the development of the country's eastern region and provide stable gas supply for foreign partners.

Under the 30-year agreement for the Power of Siberia pipeline, Russia would increase the gas volume each year and ultimately the annual volume will reach 38 billion cubic meters. 

Official data shows that in 2023, the total volume of natural gas supplied by Russia to China through all pipelines, mainly via the Power of Siberia pipeline, amounted to around 22.7 billion cubic meters, a 1.5-fold increase compared to 2022. Export revenue surged by nearly 60% to reach 6.4 billion U.S. dollars.

In 2023, both sides signed a long-term purchase and sales agreement for natural gas through the Far Eastern route, further boosting Russia's gas supply capacity to China. The two sides also announced that they have agreed to make payments in their own currencies, marking the first time in the history of Sino-Russian energy trade. The new payment method is expected to further facilitate higher-level cooperation in terms of energy trade.

In addition to the operational Power of Siberia pipeline, China and Russia have been advancing the construction of other natural gas pipeline projects. Recently, another significant development from Russia has emerged. According to Russian media reports, the Ambassador of Kazakhstan to Russia revealed that Russia plans to construct a natural gas pipeline within Kazakhstan to supply natural gas to China. While specific details are still under discussion, the pipeline's route has been determined, boasting an anticipated annual transportation capacity of up to 35 billion cubic meters.

The concept of mutual complementarity and mutual benefit has been instrumental in fostering the continuous improvement of bilateral energy cooperation and natural gas trade.

Firstly, China's sustained social and economic development has led to a steady rise in energy demand. In order to sustain its development pace and achieve its goals, China needs abundant, stable and secure energy supplies.

Russia plays a crucial role in the global natural gas supply chain. The country possesses the world's richest natural gas resources, with its proven reserves making up more than 22% of the world's total, ranking first globally. The country's annual natural gas production consistently ranks among the highest globally, holding the second position in 2022 with a share of 15.3% of the world's total. Russian Deputy Prime Minister Alexander Novak has suggested that the country's annual natural gas supply to China via pipelines could increase to 100 billion cubic meters in the future.

Secondly, this collaboration has not only provided Russia with outlets for its energy  but has also met China's energy needs. Undoubtedly, this partnership represents a win-win situation. The bilateral energy cooperation with its history, evolution and experiences can further consolidate Sino-Russian cooperation and friendly relations.