Russia and China to discuss closer gas, financial ties during Putin visit, says Kremlin

MOSCOW (Reuters) -Russia and China will discuss closer gas and financial ties during President Vladimir Putin’s trip to Beijing for the Winter Olympics, the Kremlin said on Wednesday, and a long-held idea for a new gas pipeline to China is being examined.

Putin and his Chinese counterpart Xi Jinping will have lunch together on Friday, and could sign more than 15 agreements, Kremlin aide Yuri Ushakov told reporters, with lots of new deals being prepared in relation to natural gas. Competition got underway in the Beijing Winter Olympics on Wednesday as the shadow of war in Ukraine and the impending arrival of Putin, who will attend Friday’s opening ceremony, loomed over an event already transformed by the coronavirus pandemic.

Ushakov said the possibility of Russia building a new gas pipeline to China through Mongolia was being looked at, a project that has been discussed for a long time and would take years to be fully realised. Deliveries via an existing pipeline, the Power of Siberia, a 4,000 km (2,485 miles) project that transfers gas from eastern Russia to China, began in 2019. It took around a decade to reach an agreement on supply terms.

Some experts doubt that a second gas pipeline from Russia to China, which recently overtook Japan as the world’s largest importer of sea-borne liquefied natural gas, will come to pass. But Putin’s visit comes at a time when the reliability of Russian gas supplies to Europe is being questioned by some Western politicians and when Moscow is keen to show it potentially has other options even if they are not realistic overnight. “It is worth noting that the Chinese gas market is the most promising and fastest growing in the world,” said Ushakov.

Spot gas prices in Europe reached all-time highs in December amid soaring demand and limited supply. Russian gas supplies to Europe have come under scrutiny as thousands of Russian troops have massed near the border of traditional gas transit nation Ukraine, raising fears of an invasion, something Moscow denies planning.

Western nations have threatened a slew of sanctions should Russia make an incursion onto Ukrainian territory. Ushakov said China supported Russia’s effort to extract security demands from the West. Ushakov also said Moscow and Beijing were making serious efforts to create joint financial infrastructure that could safeguard Russia-China cooperation from potential sanctions from third countries.

Foreign Minister Sergei Lavrov, Energy Minister Nikolai Shulginov and Igor Sechin, CEO of oil major Rosneft will be among the Russian delegation, Ushakov added.