The European Union Loses And Sends Russia Into The Arms Of China

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After the Shanghai Organization plus partners summit, the main star was not the host, Chinese leader Xi Jinping, as one would probably expect (he was at the big military parade in Beijing where the new Chinese strategic weaponry was shown), but Indian Prime Minister Narendra Modi and Russian “isolated” President Vladimir Putin. However, it is important to point out that the China-Russia summit was held, as well as the talks between the two countries with neighboring Mongolia.

Speaking of the latter, and that is the subject of this article, it should be emphasized that Russia, China and Mongolia signed a memorandum on the construction of two gas pipelines: “Power of Siberia 2” and “Soyuz Vostok” (“Union East”, English), and the latter is actually a transit gas pipeline through Mongolia to China.

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This was confirmed by the chairman of the board of the Russian state gas giant Gazprom, Alexey Miller, as reported by Russian media. According to him, the memorandum is “legally binding”.

“Based on the public statement of the leaders of three countries – Russia, China and Mongolia, a legally binding memorandum was signed today on the construction of the Power of Siberia 2 gas pipeline and the Soyuz Vostok transit gas pipeline through Mongolia. This project will enable the delivery of 50 billion cubic meters of gas per year from Russia in transit through Mongolia,” said Miller.

If the first part of the gas pipeline (Power of Siberia 1 leads to northeastern China, then “Power of Siberia 2” will lead to the northwest, where the Chinese Xinjiang-Uyghur region is located, which does not border Russia, but Mongolia (which is why the transit pipeline is needed).

The construction of Power of Siberia 2 has been the subject of talks between China and Russia for several years. The talks accelerated during the war in Ukraine, when the European Union almost stopped buying Russian gas; the only exceptions were the European branch of the Turkish Stream gas pipeline for Southeast Europe and part of Hungary, and the Druzhba gas pipeline for Hungary and Slovakia, which has repeatedly interrupted the supply due to Ukrainian attacks. The question should be asked why Kiev is doing this when it is simpler to stop pumping Russian gas that passes through Ukrainian territory? At the same time, China was considered as an alternative, i.e. substitute buyer.

Although European media is pushing the story that Moscow and Beijing could not agree on the price of gas and therefore the construction of Power of Siberia 2 has not started – I personally think that Moscow left the European Union room to change its anti-Russian energy policy and return to cheaper Russian gas. In addition, Russia achieved the highest gas prices on the European market, and this was an important reason for Russian procrastination.

In the summer of this year, Reuters wrote that the construction of the Power of Siberia 2 could begin due to the situation in the Middle East, while in the spring, Bloomberg assumed that Beijing would agree to higher gas prices amid worsening problems in the global economy.

The epic discussion about the future of the second gas pipeline from Russia to China has ended, and it is now taking practical shape. China will now receive more gas via the far eastern route than originally planned.

“Power of Siberia 2” is a project to supply gas from the West Siberian fields to China via Mongolia at a rate of 50 billion cubic meters per year. The contract should be concluded for 30 years.

Gazprom and CNPC also agreed to increase pumping through Power of Siberia (1) from 38 to 44 billion cubic meters per year. The parties also signed agreements to increase the amount of supply via the Far Eastern route from 10 to 12 billion cubic meters.

Power of Siberia 1 is the main gas pipeline from Russia to China, about three thousand kilometers long. The first gas came from the Chayandinskoye field in Yakutia at the end of 2019. Three years later, pumping began from the Koviktinskoye field in the Irkutsk region.

The difference between Power of Siberia 2 and the first gas pipeline for China, which is already in operation, is that in this new case that country will not be supplied with quantities specially developed and produced for China, but with gas that was previously delivered to Europe – from West Siberian fields.

Due to sanctions and counter-sanctions, EU gas deliveries fell sharply. In June, the EU announced the final plan for the complete rejection of Russian gas – from 2028. Negotiations on the construction of the Force of Siberia 2 took a long time, and China is considered a difficult negotiator in Russia, including on the issue of supply prices – Russian media reported.

Conclusion

It is now clear that the two countries are starting to implement the Power of Siberia 2 gas pipeline, for which an agreement on a transit gas pipeline through Mongolia was necessary; it also became clear that Russia has finally crossed the European Union as a buyer of its gas from the vast West Siberian reserves.

Of course, this is definitely not Russia’s primary wish, but the final decision of the European Union to completely renounce Russian gas by 2027. How much it will pay off for her in the end is a completely different topic. But along with China (it resolved the long-term strategically important issue of energy supply) and Russia (it transferred China to its energy “needle” and compensated for the loss of Europe), is the United States. In fact, they will completely dominate the European energy market with their more expensive energy products, which was best seen after the recent trade agreement between the USA and the EU, which is completely unfavorable for the EU.

As in big games, this energy focus was ​​Eurasia and there cannot be only one winner. But, someone must also be defeated – and in this game it is the European Union!