EUs reliance on Putin deepens as China resells Russian gas

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China has helped Russian President Vladimir Putin maintain his influence over Europe, by buying gas from Moscow and reselling it to Europe, according to reports. Since Putin ordered troops into Ukraine in February, the European Union has been scrambling to end their reliance on the Kremlin for energy exports. This dependence was exploited by Russia as began squeezing gas flows, which sent prices soaring and now threatens to plunge the continent into a cold winter where a shortage of supplies leads to energy rationing and blackouts. While the EU has been scrambling to find other suppliers, they may find it difficult to end their reliance on Russian gas, as some of China’s exports may have come from Moscow.

Over the past year, despite facing an economic and industrial slowdown due to the country’s stringent “zero-covid policy”, Beijing has been snapping up massive supplies of Russian gas, while imports from other sources have decreased. 

Since Russia’s invasion of Ukraine, Beijing has increased its energy imports from Moscow from $20billion (£17.9billion) a year ago, to $35billion (£31billion) now, according to figures from Bloomberg.

Meanwhile, China has also ramped up its exports of liquefied natural gas (LNG) exports have also reached record levels, with Chinese companies selling 4 million tons of LNG on the international market.

This is a massive figure, worth about 7 percent of the EU gas consumption during the first six months of the year, although all of China’s exports did not go towards Europe.

Jovo, a Chinese LNG trading company, reported that it had resold one LNG deal to a European buyer, according to the Epoch Times. Meanwhile, Nikkei quoted a futures trader in Shanghai who said the profits gained from such a trade could be worth $100million (£89.8million).

China’s state-owned energy company Sinopec also reported that was selling “surplus” LNG supplies on the international market, reselling 45 cargoes of LNG, or about 3.15 million tonnes.

Figures that within the first eight months of 2022, Beijing exported $164million (£147million) worth of LNG to Europe, and a further $284million (£255million) to countries like Japan and South Korea, that have joined the West in sanctioning Russia.

Wang Yongzhong, director of international commodities Research at the Institute of World Economics and Politics of the Chinese Academy of Social Science warned that it was difficult for Europe to import large quantities of LNG from countries like the US, Australia and Qatar in the short term, owing to logistical challenges. 

Frank Tian Xie, a marketing professor at the Aiken School of Business at the University of South Carolina, said that as the EU tried to end its reliance on Russia, they could become dependent on the Chinese Communist Party for energy.

He told The Epoch Times: “It suddenly gives the CCP new leverage. The CCP now has the ability, and the possibility, to cut off gas supplies to Europe in response to Russian demands.”

Beijing and Moscow have been deepening their energy ties, as Russia announced the Nord Stream 2 pipeline, the £8billion project set to pump gas to Europe through the Baltic Sea, will now be replaced by a new pipeline that will export huge amounts of gas to China.

The 750-mile-long Nord Stream 2, would have bypassed Ukraine and Poland and doubled Russia’s gas exports to Germany. However, earlier this month Moscow’s Energy Minister Alexander Novak announced the scrapped pipeline is to be replaced by the Asian Force Siberia 2.

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When asked in an interview with Russian television channel Rossiya-1 whether Russia would replace the European Nord Stream 2 with the Asian Force Siberia 2, Mr Novak said: “Yes.”

During a visit to Uzbekistan earlier this month, the energy minister noted that Russia and China will soon sign an agreement that would deliver about 50 billion cubic metres (bcm) of gas per year through the future Force 2 pipeline in Siberia.

This new pipeline, also known as the Power of Siberia 2 pipeline, will almost completely replace the maximum capacity of gas of the Nord Stream 1 pipeline, at 55 bcm.

Since the start of this month, Russia has completely and “indefinitely” halted flows through this pipeline, citing maintenance work following a leak. 

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