NEW YORK (Oil Price) -
Russian plans to increase natural gas exports to China by almost 50 percent this year, Deputy Prime Minister Alexander Novak has said.
Russia’s Gazprom sends gas to China via the Power of Siberia pipeline under a 30-year contract worth a total of $400 billion. The pipeline was launched in 2019, and last year saw 15.5 billion cu m of gas flow through it.
This should increase this year to 22 billion cu m and gradually reach its full capacity of 38 billion cu m in 2027.
“Last year’s gas supplies were at 15 billion cubic meters. In 2023, we expect 22 billion cubic meters, an almost 50% increase,” Novak said.
There are also plans to expand the Power of Siberia with a twin pipeline, the Power of Siberia-2, with a view to boosting gas supplies to China to at least 98 billion cu m by 2030. Still, this is substantially less than the record 177 billion cu m, which it supplied to Europe in 2018 and 2019, Reuters notes.
The deputy PM, meanwhile, also said Russia was receiving more yuan payments for its oil and gas exports. It is also selling more oil and gas for rubles, Novak said.
The trend is part of what effectively amounts to a divorce between Russia and the West in the wake of the war in Ukraine and the latter’s response, which took the form of a barrage of sanctions and asset seizure.
“The yuan and rouble are in high demand, so that vector will continue. China already pays in yuan for gas and partially for oil, there are settlements in the rouble as well,” Novak told Russian media, as cited by Reuters.
The Chinese currency accounted for 23 percent of Russian import payments last year, which was up from 4 percent in the previous year.