The world's largest exporter of natural gas and one of the world's largest consumers of fuel: Russia and China have inaugurated the Power of Siberia pipeline, a project that takes bilateral energy cooperation to a new level. The conduit, the result of a 30-year agreement signed in 2014 between the Russian giant Gazprom and the Chinese company CNPC, was inaugurated on 2 December by videoconference between the two countries’ presidents, Vladimir Putin and Xi Jinping. This is the largest contract ever signed by Gazprom, amounting to USD 400 billion, and provides for a maximum annual supply of 38 billion cubic meters of gas when the infrastructure reaches its maximum capacity. Power of Siberia is also an important turning point for the policies of the two countries, which will now be able to deal with their respective energy strategies differently.
Russia now has a firm view of the so-called “eastern route”, while definitely not neglecting the European customers who remain the main market. In Moscow, however, awareness is growing of a major new outlet for Russian gas production. “This year marks the 70th year of diplomatic relations between Russia and China. This year we are also turning on the supply of Russian gas to China,” Putin said during the inauguration ceremony. “This step brings us closer to achieving the task of bringing bilateral trade turnover to USD 200 billion in 2024, which we have decided on together with Chinese President Xi Jinping,” Putin added. For China, on the other hand, this is an opportunity: its maximum share of supplies of 38 billion cubic meters of natural gas per year is equal to 15.6 percent of Chinese consumption in 2018, according to data from the Beijing Commission for National Development and Reforms. This confirms that China still has ample room to increase natural gas consumption, as clean energy accounts for only about 8 percent of its primary energy consumption, while in many developed countries, it stands at over 20%.