Russia: the severe gas snub inflicted by China on Putin regarding the Power of Siberia 2 pipeline

“To test the ‘limitless’ friendship between Russia and China”, headlined Le Monde on May 16 about the state visit of newly re-elected Russian President Vladimir Putin to the all-powerful Xi Jinping’s China. A meeting closely scrutinized by Western chancelleries which, as CNBC explains, are still seeking to fully understand the complex and changing dynamics between the two countries.

On the surface, China and Russia seem to want to stand together against the rival West and its allies, particularly since the start of the large-scale war led by the Kremlin in Ukraine.

Behind the veil, and despite an undeniable strengthening of the economic or military axis constituted by the two countries, things are however more nuanced. The Middle Kingdom, a major customer of Russian gas and oil, seems to be in a perfect position of strength to make Russia a simple vassal.

The rest under this advertisement

The “Power of Siberia 2” gas pipeline, symbol of Russian dependence

And this, behind the smiles and declarations of unwavering camaraderie, is what Vladimir Putin seems to have been reminded of behind the scenes during this recent official visit. The Russian president, who has been pivoting sales of his country’s vital hydrocarbons to the east since the outbreak of the war in Ukraine, had come to advance the issue of the colossal Power of Siberia 2 pipeline.

The rest under this advertisement

As Le Grand Continent recalled on May 16, and as we detailed in November, Power of Siberia 2 is a giant gas pipeline project, planned to transport 50 billion cubic meters of gas between Russia and its Chinese client by year. Before its sabotage in 2022, Nord Stream was capable of supplying Europe with 55 billion cubic meters of Russian gas each year.

If Power of Siberia 2, which is to come in addition to the first of the name, has been under discussion for years, we understand to what extent the volumes it allows to transit are vital for Russia’s energy pivot towards the east and towards Asia.

It is therefore apparently with the hope of convincing China to give the final green light to the deployment of the project that Vladimir Putin and his entourage arrived in Beijing for this important official visit.

The rest under this advertisement

“Power of Siberia 2”: the Chinese and gas snub of Vladimir Putin

But according to Newsweek, this was a new snub for the Russian president: knowing its ally weakened, in particular by the war in Ukraine and the exorbitant cost it represents for the Kremlin, China has important levers of discussion regarding the destiny of Power of Siberia 2, and continues to play them to the fullest.

As the American media explains, the joint statement from China and Russia, published at the end of the visit, reports a “new era” in the “unlimited cooperation” between the two nations. In fact and on the question of gas and Power of Siberia 2, it was however empty-handed that Vladimir Putin returned to the country.

The recent (and big) concessions made by Russia to China in terms of energy prices, with gas sold 28% cheaper than to Europe until at least 2027 as reported by Bloomberg on April 23, it seems, was not enough.

The rest under this advertisement

After yet another red light during the international meeting on the New Silk Road (Belt and Road Initiative) in October, China continued in the following months to use its dominant position to make Russia accept the conditions it wanted, as the South Morning China Post explained in November.

The collapse of Gazprom

Last week’s meeting between Vladimir Putin and Xi Jinping, although it resulted in a rather vague statement on major future energy cooperation projects between the two nations, did not advance Power of Siberia 2 an inch. . A major building block of this deepened relationship, the gas pipeline has still not been validated by Beijing, which would particularly like Moscow to pay in full for its construction.

Which puts Russia in a more than delicate situation. Already largely weakened since the start of the large-scale war in Ukraine, the Russian gas giant Gazprom, the country’s energy champion and the Kremlin’s major financial provider, recently announced record losses, as reported by France Info.

The rest under this advertisement

Its stock market value has continued to collapse in recent days. The Chinese blockades will undoubtedly not improve the picture on the markets, but this is why Beijing, intractable, can still weigh even more heavily in the next negotiations around Power of Siberia 2. A “friendship without limits”, Really ?