Russia and China Open $55B Natural Gas Pipeline

The People’s Republic of China and the Russian Federation have been increasingly warming their ties, and the latest gas pipeline could take their relationships further.

What Happened

The leaders of the two countries Vladimir Putin and Xi Jinping inaugurated the $55 billion pipeline project on Monday. It will transport natural gas from Russia’s Siberia to the northeastern part of China, the National Public Radio reported.

The pipeline that stretches over 5,000 miles, according to the NPR, will see China importing up to 5 billion cubic meters of natural gas in 2020. The imports could increase up to 38 billion cubic meters per year by 2024, the NPR said.

The pipeline called the “Power of Siberia” in Russia has been constructed over the last five years after the two countries signed a $400 billion 30-year gas supply deal in 2014.

“China and Russia are at a crucial stage in their national development, and our relations are entering a new phase as well,” Xi said at the inauguration of the pipeline. 

“I hope that our countries will continue working to create even more landmark projects like the Chinese-Russian gas pipeline in the interests of our countries and to the benefit of our peoples,” he added.

Why It Matters

China’s northeastern region continues to rely overwhelmingly on coal, according to the Chinese state-run news agency Xinhua. 

The natural gas supply from Russia is expected to change that, starting with the city of Heihe, which has already seen more than 30,000 people switching from coal to natural gas, according to Xinhua.

With the new pipeline, China expects to increase the use of natural gas in the country by 10% at the end of 2020, and another 15% by 2030, Xinhua said.

The project is significant for, as they are facing sanctions from the U.S., CNBC said.