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Since the Ukraine War, Russia has been increasing its energy ties to China

China has increased its purchases of Russian gas and oil since the beginning of the conflict in Ukraine 2022. Moscow and Beijing declared a partnership "without limits" just days before war broke out.

When Presidents Vladimir Putin & Xi Jinping met in China on February 2, the energy relationship between both countries was expected to be a major topic.

The energy relations between the two countries are based on the following facts:

Gazprom, the Russian energy giant, supplies natural gas to China via a 3,000 km pipeline (1.865 miles) called Power of Siberia, under a $400 billion, 30-year deal signed at the end of 2019

Exports in 2024 will be around 31 billion cubic meters. The supply is expected to reach the 38 bcm planned capacity this year.

China agreed in February 2022 to purchase up to 10 billion cubic meters of gas per year by 2026-2027, via a pipeline that will run from Sakhalin Island to the Far East of Russia.

Russia's annual gas exports to China still represent a tiny fraction of its record 177 billion cubic meters (bcm) to Europe.

Russian gas is now only 18% of European imports. This is down from 45% by 2021. Oil imports to the EU from Russia are also down from 30% in that period to just 3%. The European Union intends to completely phase out Russian energy in 2027.

Russia and China continue to discuss a new Power of Siberia 2 gas pipeline that can deliver 50 billion cubic meters of gas annually from Russia to China through Mongolia.

Gazprom started a feasibility study in 2020 for the pipeline, but now the project is more urgent as Russia looks to China as a replacement to Europe as the country's major gas consumer.

Last year, Russia's exports of liquefied gas to China increased by 3.3%. They reached 8.3 million tons. After Australia and Qatar Russia was the third largest LNG supplier to China. China is the world's biggest buyer of seaborne gas.

Since late 2022, China has ignored most of the sanctions imposed on Russian crude by Western nations.

Due to its close proximity, China, the world's largest oil importer, and a major Russian oil buyer, primarily purchases East Siberia – Pacific Ocean (ESPO), crude oil exported from the Russian Far East Port of Kozmino.

China's crude imports from Russia increased by 1% to a new record in 2024, compared with 2023. Purchases from Saudi Arabia fell 9%.

According to China's General Administration of Customs (GAC), the volume of Russian oil - including seaborne and pipeline supplies - was 108.5 million tons last year, which is equivalent to 2,17 million barrels a day.

China can also get Russian oil through the Skovorodino - Mohe pipeline spur on the 4,070-km (2.540-miles) ESPO pipe, bypassing all vessel and cargo restrictions. The pipeline has the capacity to ship 30 million metric tonnes annually.

Russia is seeking to increase its oil exports via Kazakhstan to China by 2.5 million tonnes per year. (Reporting and editing by Guy Faulconbridge, Sharon Singleton and Vladimir Soldatkin)

(source: Reuters)