Editorial | China-Russia gas pipeline deal must make commercial, geopolitical sense

The slew of deals is being conducted against intense Western pressure, especially from Washington. Depending on its final scale, the gas deal could even redraw the global energy landscape and directly challenge American dominance in the sector.

Gas prices remain a point of contention, but they will be lower than those for Europeans, who have imposed heavy sanctions on Russia and are phasing out purchases because of Russia’s invasion of Ukraine. For Russia, the US$13.6 billion pipeline project will be especially important as it is desperate to find a substitute for its lost European market. Along with the existing Power of Siberia 1 pipeline, as much as half of China’s imported natural gas could come from Russia in a little over a decade, some analysts say. Last year, Russia supplied 22 per cent of China’s gas imports, equivalent to 38 bcm.

China is making a rapid transition to renewables and carbon neutrality. Will it need all that Russian gas down the road? The answer lies beyond just economics. Since February, in response to US tariffs, Beijing has almost completely halted LNG shipments from the United States. But even before the trade dispute, US gas accounted for only about 5 per cent of total Chinese imports last year.

Russia needs a market sizeable enough to replace the lost European one. China wants a reliable and lower-cost supplier. It is clearly signalling it prefers Russian over American gas and dependable pipeline supplies over riskier maritime shipments.