Gas: Russia, China Agree on Power of Siberia 2 Pipeline, Gazprom Says

Market Dynamics - Russia's potential new pipeline to China could reshape energy trade, marking a pivot east due to the EU's ban on Russian gas imports by the end of 2027 [2] - European Union Russian gas imports are dwindling, down approximately 90% from pre-war levels in 2022 [2] - China could benefit from dirt cheap gas through this deal [2] Geopolitical Implications - The pipeline deal symbolizes a deepening of economic and political ties between Russia and China, with China potentially relying on Russian energy for decades [4] - The U S ambitions to increase gas exports may face challenges due to this deal [4] Supply and Demand - The Power of Siberia 2 project, if realized, would equal approximately 40 million tons of LNG equivalent per year by the 2030s, which is half of China's LNG imports last year [5] - Chinese LNG demand growth may not rise significantly in the 2030s if the pipeline proceeds [5] Impact on US LNG Exports - Reduced Chinese LNG demand could limit American exporters' ability to sell and enter the market, impacting projects on the US Gulf Coast and in Alaska [6][7] - The deal could hinder the U S goal of energy dominance and export growth into the next decade [7][8] Pricing and Negotiation - Russia is offering gas supplies to China at a lower price than it sold to Europe, indicating Russia's need for a customer [3] - The details of the deal are still being finalized, with numerous unknowns [3]