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Russia is discussing a significant new infrastructure challenge to ship fuel to China by way of Mongolia, President Vladimir Putin mentioned on Wednesday, as Moscow appears to Beijing to switch Europe as its main fuel buyer.
“We’re in discussions in regards to the potential implementation of a significant infrastructure challenge, I imply the provision of Russian fuel to China by way of Mongolia,” Putin mentioned in a televised assembly with Mongolia’s Prime Minister Luvsannamsrai Oyun-Erdene.
The 2 leaders had been talking at Russia’s Japanese Financial Discussion board in Vladivostok on the identical day Putin threatened to change off vitality provides if the West adopts value caps on Russia’s oil and fuel exports.
Russia’s Gazprom has for years been learning the likelihood for a significant new fuel pipeline – the Energy of Siberia 2 – to journey by means of Mongolia taking Russian fuel to China.
The proposed pipeline may carry 50 billion cubic metres (bcm) of pure fuel a yr, Gazprom says – barely lower than the Nord Stream 1 pipeline which hyperlinks Russia to Germany underneath the Baltic Sea.
The present Energy of Siberia pipeline, which runs from Russia to China, was launched on the finish of 2019 with an annual capability of 61 bcm per yr. It’s set to grow to be a key income earner for Russia over the approaching years as Europe tries to ditch its historic reliance on Russian fuel.
Simply earlier than Russia invaded Ukraine, Putin signed a brand new 30-year contract to produce fuel to China. In 2021, Russia exported 16.5 bcm of fuel to China.
Earlier than the Energy of Siberia launched, nearly all of Russia’s pipeline infrastructure was geared in direction of delivery provides in direction of Europe making a pivot to the East a probably pricey and time-consuming endeavour for Moscow.
Putin additionally mentioned on Wednesday that state-controlled oil firm Rosneft had reached an settlement with the Mongolian authorities to broaden cooperation over the provision of oil merchandise.
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