WORLD: Russia is planning a new gas pipeline to China

Russia is considering another pipeline to China, this time through Kazakhstan, capable of delivering up to 35 billion cubic meters of natural gas per year, writes OilPrice.com.

Announced by Deputy Prime Minister Alexander Novak, the plan comes as Moscow leans heavily towards Beijing, already delivering 40 billion cubic meters of gas to the Asian giant this year. With Europe out of the picture for good, China is the Kremlin’s main energy customer, even if gas represents only 2.8% of Beijing’s energy mix, according to the cited source.

The logic is simple: China likes gas, and its appetite is growing. Domestic consumption rose 8.8% in the first eight months of the year to 283 billion cubic meters, fueled by urban heating, industry and a major effort to replace diesel trucks with LNG. By 2040, demand for natural gas in China is expected to increase by more than 50%.

Let’s not forget though – coal is king in China, accounting for nearly 60% of the energy mix, making gas more of a glitzy side dish than the main course, OilPrice points out.

Meanwhile, Kazakhstan is not sitting idly by. The Caspian state clearly sees room for growth, now exporting gas to China at just 4 billion cubic meters annually.

For Moscow, this pipeline would be a lifeline in its bid to strengthen ties with Beijing and fill the revenue gap left by Europe. But let’s not rush – China is not about to put all its energy eggs in Russia’s basket, and may also turn to competition to negotiate lower prices.