Elizabeth Frost, Angela Glowacki, and Jia-Shen Tsai
The governments of Russia and the People’s Republic of China (PRC) have signed a legally binding agreement to build the Power of Siberia 2 gas pipeline, according to Gazprom CEO Alexey Miller (Bloomberg, September 2). The pipeline signals deepening energy ties between Beijing and Moscow at a time when the PRC has suspended imports of U.S. liquified natural gas (LNG) in retaliation to President Trump’s tariffs (Bloomberg, March 18; Natural Gas Intelligence, October 29).
Despite steady growth in domestic production, the PRC remains externally dependent on LNG and pipeline gas for around 40 percent of its supply. Beijing’s approach to diversifying suppliers, including with Russia, is motivated by both economic and geopolitical concerns. These include desires to maintain competitive pricing, develop its position as a re-seller of LNG, respond to trade wars, and enhance strategic partnerships with key partners.
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