The story of the Siberian gas pipeline between China and Russia (and Xi’s deadly embrace of Putin) – Corriere.it

The visit to Beijing by Russian premier Mikhail Mishustin, with 1,200 entrepreneurs in tow, was greeted in both capitals with great display of rhetoric. There has been talk of “collaboration without limits”, of an “unprecedented level” in relations between the two countries. “As you like to say, dear Chinese friends, together you can move mountains,” Mishustin said. But, speaking of travel, he could have added that “no leaf moves that Beijing doesn’t want”.

Because it is true – as Guido Santevecchi also recalled in Corriere – that Russian-Chinese trade at the end of 2023 will reach 200 billion dollars, that in April Beijing’s customs recorded a 153% jump on an annual basis in exports towards Moscow that imports of Russian gas and oil into China have risen by 40%. But, in the words of Federico Rampini, «it is clear that in the long term this embrace is suffocating for Russia: Moscow’s GDP is one tenth of China’s, furthermore the People’s Republic has a more diversified economy, and has not cut the bridges with the West which indeed remains its first commercial and financial partner» (trade with «Russian friends» is worth more or less a tenth of that with the United States and the European Union).

Yet another demonstration of what it is the unbalanced balance of power between Xi Jinping and Vladimir Putin comes from the story of the planned Power of Siberia 2 gas pipeline, reported by the Financial Times. The 2,600-kilometre pipeline, which has been talked about for over a decade, should carry Russian gas from the Jamal peninsula in north-western Siberia to China, via Mongolia. With a fully operational capacity of 50 billion cubic meters per year. Given that a large part of the Russian gas was also extracted in that area which, until before the invasion of Ukraine, ended up in Europe (also through the Nord Stream 1), the new gas pipeline would allow Moscow to recover part of the money that they come more from the EU. Xi, however, despite repeated Russian requests, does not seem to be in any hurry to kick off the project. And his, writes the FT, “is a reticence which, analysts say, demonstrates how weak Moscow’s bargaining power has become vis-à-vis its economically much stronger neighbour, with the war going on”.

As Alicja Bachulska of the European Council on Foreign Relations explains, not only do the Chinese have a consolidated tradition of dragging out negotiations in order to obtain better contractual conditions, but “since the Russian aggression against Ukraine has turned into a protracted war, Beijing believes that its negotiating position vis-à-vis Moscow can only strengthen”.

A plastic demonstration of the different position on the Power of Siberia-2 (also called PS-2 or Altai, from the name of a Siberian region) also took place in March, when Xi went to visit “friend” Putin in the Kremlin. The Russian president has tried to pass off the agreement with Beijing on the new gas pipeline as a done deal (“basically all the parameters have been finalized,” he said), while Xi carefully avoided saying a single word about the project. And for Premier Mishustin, in his recent mission, things went no better, even if a promise from Xi on PS-2 was one of his main objectives.

After all, Gergely Molnar, an analyst at the International Energy Agency explains to the FT, Beijing, worried about having to depend too much on a single source, has secured much larger supply contracts than current needs and, at the moment, « it depends on Russia for only slightly more than 5% of its gas supplies». With PS-2, it should reach about 20% after 2030.

Mind you, China too knows that it should import gas by land, not through LNG tankers, which could be blocked in the event of an open conflict with the West. This is why many analysts think that closer cooperation with Moscow on gas and oil is only a matter of time. In the meantime, however, the Chinese are also looking elsewhere. The recent summit in Beijing with the countries of Central Asia – the “Stans” – was rightly indicated as a sign of the passage of that area, traditionally in the Soviet and then Russian orbit, into the “Chinese sphere of influence” . No less significant, however, is that during the summit, Xi called for the construction of a fourth gas pipeline, to add to the existing three, to bring gas from Turkmenistan to China (which already amounts to 35 billion cubic meters a year). .

Moreover, the PS-2 pipeline would be a necessary but not sufficient shot in the arm for Moscow and Gazprom (the Russian gas giant): PS-2 would generate about $12 billion a year for Gazprom, from which the state would receive about $4.6 billion in duties and taxes, according to Ronald Smith, an oil and gas analyst at BCS Global Markets. Such a sum, equivalent to less than half of Russia’s average monthly energy sector revenues in 2023, is unlikely to be transformative. But the Kremlin is desperate for additional revenue as its budget deficit rises, the costs of war so do and its gas sales to Europe fall.

It’s hard to think that Xi will “strangle” his friend Putin. But even less probable is that he lets himself be moved to the point of giving up on doing his own interest first and foremost. The Global Times, an English-language nationalist Chinese newspaper, can take it all the way it wants with the Western media, as it did in an editorial published yesterday, in an attempt to deny unwelcome evidence to its Russian “friends” (“Western media, overflowing confrontational, get nervous at the sight of normal cooperation between China and Russia, or argue that China and Russia “join forces to oppose the West” or sing the old tune “Russia is dependent on China” to provoke relations China-Russia”). Opinions are often as evanescent as gas. The facts, much more solid.

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