Friendship is unquestionable, close, and has a common enemy: what remains of the awakened US-led global order. Immediately after the G7 meeting in Japan, in which it was decided to help Ukraine even more and contain China, Xi Jinping received Russian Prime Minister Mikhail Mishustin in Beijing, and the two promised each other “firm and on issues of fundamental interest”, i.e. economy, security and military development. One thing Putin is certainly very keen on is finding new outlets for his gas industry, which has almost completely lost its most profitable market, Europe. The obvious alternative is to increase deliveries to China (it must be said, however, that Turkey is also proving to be an excellent customer).
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Putin has therefore been wanting to close a new supply contract with Xi Jinping for a long time. The gas pipeline in the pipeline is called Power of Siberia 2, 6700 kilometers long, capable of carrying 50 billion cubic meters of gas every year from Russia to China, passing through Mongolia. The Russian government has announced several times that almost all parameters have been agreed and that Gazprom is ready to go. The completion works of the structure – says the Russian government – should last five years. The only thing missing is the contract. But the Chinese friend hesitates, he calculates for him. Putin waits. And in the meantime Gazprom is falling apart: it is the Russians themselves who have announced that this year their gas exports through pipelines could be halved.
Between January and March, Russian oil and gas revenues fell 45% compared to the same period last year. The Russian deficit is starting to rise: this year the Kremlin had forecast a deficit of around 2% of GDP, but the accounts already don’t add up. Several analysts now expect a deficit of between 6 and 8 trillion rubles, between 4 and 5% of GDP, high numbers by Russian standards.
So the agreement for Siberia 2 is vital, and it is very probable that the signing of the green light will come sooner or later. Not now though: Chinese officials inform Reuters news agency that Xi Jinping has given priority to a new connection with Turkmenistan, 30 billion cubic meters a year, this despite Turkmen gas, adds Reuters, costs China 30% more than the Russian one. According to Reuters sources, feasibility studies on the project – which is called “Linea D” – began last week. “This means Line D is being prepared,” the source said. Last year, China imported 35 billion cubic meters of gas from Turkmenistan, against 16 billion from Russia through the Power of Siberia. “Central Asian gas pipelines are seen by China as a key investment,” said a Chinese official familiar with the plans of CNPC, the state-owned energy giant. But the strategy is quite clear, and you don’t need an analyst to understand it. China diversifies sources, puts them in competition with each other, minimizes risks and extracts favorable conditions. As mentioned, the signing of Siberia 2 will come sooner or later. But Putin still has to wait, or simply offer his Chinese friend even more advantageous prices.
And China in the meantime is increasingly present in areas of historical Russian influence. Last week, while G7 leaders were in Japan, Xi Jinping hosted the heads of five STAN countries (Kazakhstan, Kyrgyzstan, Tajikistan Turkmenistan and Uzbekistan), former Soviet republics, for a summit organized in northwest China. In fact, Central Asia is decisive for the expansion of the Silk Roads, the infrastructure and trade project with which Beijing wants to expand its influence in the world by challenging America. Too bad that Russia was not invited to the summit.