Russia to become China's largest gas supplier in the face of Western sanctions

Russian energy giant Gazprom is slated to become the largest natural gas supplier to the Chinese market as deliveries continue to flow in Beijing via the Power of Siberia mega pipeline in the face of the West-coordinated sanctions, Russia's deputy director of the strategy department, Kirill Polous, told the state-affiliated press on Tuesday. This comes as Moscow's state-run gas giant signed an additional agreement to its existing contract with China National Petroleum Corp. this week to boost the gas exports, Gazprom informed in a statement. Russia will accept payments that will be made 50% in rubles and 50% in yuan, effective immediately. 

“Taking into account the previously signed contract for the supply of gas under the Power of Siberia project, the total contracted volumes amount to 48 billion cubic meters [including deliveries from Russia’s Far East]. With a high degree of probability, after reaching the specified volume of exports, Russia may become the largest gas supplier to China,”  Polous, said at the St. Petersburg International Gas Forum.  “At the same time, it is also important that while developing cooperation in the gas industry, Russia and China do not increase mutual dependence to critical levels,” he added. 

Moscow agreed to switch to national currencies in trade settlements with China

Russia's deputy director of the strategy department, during the address, reminded that Moscow has agreed to switch to national currencies in trade settlements between two ally nations. He continued, “during the Eastern Economic Forum, an agreement was reached to transfer payment for gas supplies via the Power of Siberia gas pipeline into rubles and yuan.” “We are talking about stable pricing mechanisms and the absence of regulatory barriers for the implementation of gas projects,” he noted. 

China has agreed to start fulfilling its gas supply contracts and will make payments in its local currency rubles or yuan instead of euros or dollars, Russia’s Gazprom separately confirmed in a release. Gazprom CEO Alexei Miller said in a Telegram statement that the payment arrangement with China would prove "mutually beneficial" for both state-owned energy agencies. It would also bolster trade ties between Russia and China economies amid heightened tensions with the West." He further underscored that the arrangement will simplify the calculations, as well as will serve as an excellent example for other companies and give an additional impetus for the development of our economies.