China prepares to become an alternative to the EU in Russia’s gas supply market
Following the Russia-Ukraine war, the European Union (EU) has been discussing for some time imposing a price cap on Russian gas, but a common decision could not be reached due to the insistence of different views on the price of the countries of the union.
The EU, which met about 45 percent of its annual gas imports from Russia before the war, imported about 155 billion cubic meters of gas from Russia in 2021.
The EU, which began imposing a $60 price ceiling on Russian oil since December 5, is discussing a €220 per megawatt-hour price ceiling for Russian gas.
EU ENERGY MINISTERS MEET TODAY
Germany opposes the application of the maximum price, considering that it will complicate the security of gas supply. Belgium, Poland and Italy see price caps as a way to protect consumers and the economy from energy price shocks.
At TTF, the Netherlands-based virtual natural gas trading point with the deepest depth in Europe, the gas price per megawatt hour rose to 340 euros in August, from around 130 euros recently.
EU energy ministers will meet again today to discuss the issue of the natural gas price cap.
CHINA WILL INCREASE GAS IMPORTS BY 50 BILLION CUB METERS
Russia, which views Europe as an important market in natural gas exports, is seeking to build the Siberian Power 2 with an annual capacity of 50 billion cubic meters on top of the Siberian Power 1’s 38 billion cubic meters. , which is already in service, in order to increase gas exports to China.
The Power of Siberia 2 pipeline, which is scheduled to start construction in 2024 and be commissioned in 2030, will transport Russian gas through Mongolia to the interior of China. Thus, when the two pipelines reach their full capacity, they will transport 88 billion cubic meters of Russian gas to China annually.
The amount in question means that Russia is diverting more than half of the gas it sold to the EU before the war to China, and will put Russia at the top of China’s gas supply chain.
Gas supplied by Russia as a pipeline and LNG in 2021 accounted for about 10 percent of China’s total imports.
CHINA TO BUILD 34 NEW LNG TERMINALS
There are 15 gas storage facilities with a total capacity of 17 billion cubic meters and 24 LNG gathering facilities with a capacity of 109.5 million tons in China.
The Beijing government aims to increase this capacity to 224 million tons by building 34 more LNG terminals by 2035. Most of the terminals are located in cities on the east and south coasts of the country. (AA)