Factbox-Russia and China could sign energy deals and other agreements between Moscow and the West | world news

(Reuters) – Russian President Vladimir Putin is meeting Chinese leader Xi Jinping this week when he attends the Beijing Winter Olympics and they may seek to deepen trade ties in energy and other areas at a time when Moscow is at odds with the West over Ukraine.

Putin and Xi could sign 15 deals, Kremlin aide Yuri Ushakov said, adding the deals could cover energy, which is already an area of ​​close cooperation between oil and gas exporter Russia. and the world’s largest energy consumer, China.

Ushakov did not elaborate in his comments on Wednesday, though China may want to get more gas from Russia to use as a transition fuel in its move away from dirtier coal, which produces more emissions. of greenhouse gases.

“A number of options are being discussed to increase Russian gas to China,” said a Beijing-based gas consultant who asked not to be named, adding that Putin may welcome any deal as he was “anxious to play the China card” in Moscow. showdown with the West.

China is Russia’s largest export market after the European Union. Russian imports to China amounted to $79.3 billion in 2021, with oil and gas accounting for $44.58 billion or 56%, according to China’s customs agency.

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“The two nations have established a mutually beneficial energy alliance,” Putin said in comments carried by China’s Xinhua news agency, saying these included oil and gas cooperation and other projects, including the nuclear energy.

Below are details of existing energy and other trade links:

Russia, Beijing’s third-largest gas supplier, exported 16.5 billion cubic meters (bcm), or about 12.07 million tonnes, of fuel to China in 2021, meeting about 5% of Chinese demand, shipped by pipeline or shipped by liquefied natural gas (LNG tankers).

Russia’s main export route is a 4,000 km (2,500 mile) pipeline that connects fields in eastern Siberia to northeast China.

Supplies through the Power of Siberia pipeline began in 2019 and are expected to reach 38 bcm per year by 2025, up from 10.5 bcm in 2021, under a 30-year contract worth over $400 billion.

Russia, which plans to invest $55 billion in exploration and pipelines, aims to build a second gas pipeline, Power of Siberia 2, with a capacity of 50 billion m3 per year to pass through Mongolia.

China, which overtook Japan last year as the world’s top LNG buyer, imported 4.53 million tonnes of LNG worth $2.78 billion from Russia in 2021, figures show. Chinese customs, placing Russia behind Australia, the United States and Qatar.

Russia’s Novatek wants to rival Qatar as the world’s top LNG producer over the next few decades and Chinese companies including CNPC have invested in its Yamal LNG and Arctic LNG-2 projects.

Russia is China’s second largest oil supplier after Saudi Arabia, with average volumes of 1.59 million barrels per day last year, or 15.5 percent of Chinese imports.

About 40% of supplies pass through the 4,070 km (2,540 mile) ESPO (East Siberia Pacific Ocean) pipeline which has been funded by Chinese loans worth an estimated $50 billion.

EXCHANGE COOPERATION

Both China and Russia say they want to increase the global role of their currencies and reduce their dependence on the US dollar.

China uses its Belt and Road Initiative to promote yuan trade and has signed local currency swap agreements with many participating countries, including Russia.

Russia added the yuan to a list of reserve currencies in 2015, and by 2021 around 13% of its international reserves were held in Chinese currency. Russia’s total reserves now stand at $640 billion.

In 2021, Russia added the yuan to its National Wealth Fund (NWF), part of state reserves, saying it needed to diversify its savings.

China and Russia have also developed alternatives to SWIFT, the international payment network. Beijing has encouraged the use of its local alternative, known as the CIPS Clearing and Settlement Services System. Moscow has implemented its own banking messaging system, known as SPFS.

(Reporting by Chen Aizhu; Additional reporting by Andrey Ostroukh, Oksana Kobzeva and Vladimir Soldatkin; Editing by Edmund Blair)

Copyright 2022 Thomson Reuters.

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