In the next few years, Moscow will not have the gas pipelines, or the ships, or even the fuel
Selling more gas to China is one of Putin’s oldest projects. And it makes sense. Unfortunately for him, it has become more urgent and less feasible after the war.
EU governments can ignore Putin’s threats that he will sell to Beijing what the Europeans no longer buy. It is possible that over time he will pivot. But in the next few years, Moscow will not have the gas pipelines, or the ships, or even the gas.
A pipeline, still under expansion, brings gas to China at an annual rate of about 10 billion cubic meters (10 bcm), with the potential to supply 38 bcm at full capacity in a few years. This figure compares with the 155 bcm that the EU bought in 2021 and with the 210 bcm that Russia exported by gas pipeline. An agreement was reached with Beijing in February for another, and a long-term project to bring gas from the Yamal Peninsula may one day be agreed. But the construction of a new gas pipeline can take 15 years from its conception.
China is also taking some of Russia’s liquefied natural gas from its eastern fields. But it is an area where Western sanctions are hitting hard. To increase deliveries, Russia would need new ships capable of traversing the ice during the long winter. But they are made in South Korea, which is participating in the sanctions.
Even if Russia could build those ships, they wouldn’t be able to carry much extra gas. Gas from new fields cannot be liquefied without Western technologies, and Western oil majors like Shell and Total have pulled out of projects they invested in.
Finally, if all of Putin’s projects with China pan out, the upper limit could be that Beijing resists relying too heavily on Russian energy, despite becoming the top importer of its oil and gas this year by leveraging its position to get favorable prices.
The EU appears to be cooling off on applying a cap on the price of Russian gas. If it’s because of the fear that Moscow could pivot to the east, they should relax.
