Plenty of Russian gas is flowing to China

Foreign Affairs

Russia-to-China natural gas exports are rising despite what may have been an energy-related spat in late March. And after over a decade of delays, Russia finally completed its portion of a rail bridge connecting the two countries.

Construction workers at the Power of Siberia gas pipeline in Qinhuadao, Hebei Province, April 22, 2020. Oriental Images/Cao Jianxiong via Reuters Connect.

Russian gas giant Gazprom reported that China-bound delivery of natural gas in the first four months of 2022 exceeded flows in the same prior-year period by nearly 60%.

While the contract terms of the sole Russia-to-China natural gas export pipeline, Power of Siberia (PoS), have never been disclosed, the increase in volume was expected by industry analysts. It’s unclear if deliveries were affected in any way by the Russian invasion of Ukraine.

Meanwhile, there has been no visible progress in negotiations about Power of Siberia-2 (PoS-2), a second planned pipeline to send Russian gas to China. Any bilateral negotiations, if they are even occurring, seem to be taking place in non-public settings. Although the two energy bureaucracies are still maintaining contact (including a recent announcement that energy trades would still be conducted in dollars), public interactions between Chinese and Russian energy officials have been reduced since the February 24 invasion.

There may have been a bilateral spat in late March revolving around energy ties. On March 23, Gazprom announced it would suspend gas transportation along the PoS from April 1 to 7, reportedly over scheduled maintenance. While scheduled maintenance is a plausible explanation for the suspension, the notice’s timing is significant and perhaps not coincidental. On March 23, Beijing unveiled its new hydrogen policy, which could theoretically displace most uses of natural gas and crude oil and endanger Russia’s commodity exports to China, particularly over the long term. Beijing and Moscow also appeared to be at loggerheads over Moscow’s March 22 sanctioning of Kazakhstan’s CPC crude oil terminal.

Troubled bridge over Heilongjiang waters

It’s not just gas that’s flowing: road traffic between Russia and China is also going to increase.

After over a decade of delays, the Tongjiang-Nizhneleninskoye rail bridge connecting China and Russia is expected to open within a month. China completed its portion of the bridge in 2018 (some sources say 2016), but Russia has been slow to complete its own section. Various analysts lay the blame on Moscow’s low prioritization of Russian far east economic development, weak state capacity, corruption, and ambivalence regarding China’s growing economic footprint in Russia.

The Tongjiang-Nizhneleninskoye bridge is expected to enable China to expand imports of Russian iron ore, coal, minerals, fertilizer, and wood products. Still, Chinese authorities may not be in a rush to expand economic or (perhaps more importantly) physical contact with Russia, as the bridge will reportedly not open until after the Chinese side builds a disinfection facility.