Russia's Nord Stream 2 pipeline has finally been built, and China has also helped them a lot. At the beginning, Nord Stream was built by a pipeline company in , Switzerland , and then it was suspended for a year due to the United States sanctions on the Swiss company. So Russia simply came on its own and invested in two Chinese broken ships to start working. Now that Beixi No. 2 has been built, many netizens said, "You see, there is another channel on the sales end of Russian natural gas that can be sold to Europe. So for the big Chinese buyer, will the natural gas share you will get in the future? And you see, China is already very expensive to buy Russian natural gas, will it be more expensive in the future?
I want to say that it is irrelevant to sell Ross to Europe or to other countries. Many people always like to talk about the total price of the contract of 400 billion US dollars in China and Russia, just say that Russia will raise the price of natural gas in China, which will cause great losses. So is this really the case? Let’s analyze it today.
Let’s first learn about the history of building natural gas pipelines between China and Russia. After reading it, you will find that the loss may be Putin . Two-thirds of China's natural gas is imported from foreign countries. The import method is divided into two parts: one is the liquefied LNG natural gas ship at sea, and the second is the transportation of natural gas pipelines on land.
The natural gas we get through sea mainly comes from Australia, Qatar , Indonesia and Malaysia . 19 years ago, Australia's LNG liquefied natural gas accounted for 31% of China's total imports, making it our major supplier. But later, because the Morrison government kept standing by the side, the United States deliberately smeared China, so we also restricted imports from Australia, and Australia was stabbed by the United States, and the United States seized the natural gas market that originally belonged to Australia. In January this year, the United States became China's largest liquefied natural gas supply, replacing Australia! And the United States has also cut prices to us. It is predicted that China will import 21 billion cubic meters of natural gas from the United States this year.
LNG transportation is actually a bit troublesome. First, the natural gas must be liquefied at a low temperature of minus 162℃, then seal it into a can, and then ship it to the importing country by LNG. When using it, the liquefied natural gas must be gasified, so it will be very troublesome and costly to operate back and forth. In contrast, it is much more convenient to transport natural gas using on-road pipelines.
Before 2020, we mainly rely on the import of onshore natural gas from the Central Asia natural gas pipeline. In theory, natural gas for onshore transportation can reach 51 billion cubic meters per year, and can provide stable gas supply of 30 billion cubic meters. Our largest supplier is Turkmenistan .
In the past, there was no natural gas pipeline between China and Russia because Russia's natural gas resources were mainly in the inland areas. If you want to ship the sea, you have to go to Arctic Ocean . It is all sea ice, and transportation is very difficult. When the icebreaker slowly starts, the cucumber and vegetables will be cold! For land transportation, there is an Mongolian space between them, which involves the interests of third parties.
In 1994, China and Russia actually began to consider building a land natural gas pipeline, and the two countries signed a pipeline construction agreement. But later, the location selection changed 22 times, and the contract was not officially signed in 2014. It can be seen how great the difficulties are. The two sides have conducted countless negotiations and exchanges to maximize their respective interests, which is a major project for a century.
htmlThe Soviet Union just collapsed in the 190s, when many Russian oligarchs and private enterprises wanted to monopolize natural gas. At that time, China also wanted to participate in the development of the upstream of Russia's oil and gas fields, but after Putin came to power, he said that these resources and infrastructure should be owned by the Russian state. This is Russia's strategic resource and foreign capital is not allowed to intervene. It is impossible to develop it yourself, but if you want to use it, you can buy it for money.
At that time, Germany proposed a plan for Russia, saying, "Don't Russia already have a ready-made pipeline to transport gas to Europe?" No more branch line is drawn to directly lead to Xinjiang, China.But later China refused because almost all of China's economic provinces are in the eastern coastal areas, and the eastern part is the main area for gas use. Xinjiang is far from the east, and we still need a longer distance transportation to transport natural gas from Xinjiang to the eastern coast, which is even higher. Safety factors must also be considered. Natural gas is flammable and explosive, and long-distance transportation safety costs are also very high. And if we encounter winter, the demand for natural gas in various countries will surge. How can we distribute the supply from China and Europe by relying on only one main pipeline?
Later, Russia proposed another idea, saying that a natural gas pipeline could be pulled from the east to northeast China. But we also rejected this route. Because in order to save money, Russia said that it hopes to build a pipeline to China through Baikal and Mongolia. The route is very close and can save costs. Of course, China firmly opposes it. Because this line has to pass through other countries, and what China needs is a gas transmission line that cannot be shared with others. In order to save money, Russia built the natural gas pipeline directly from Ukraine to EU countries. As a result, Ukraine has now been deceived by the United States, which later brought a lot of obstacles to the Beixin 2 project. So similarly, Russia is now building a natural gas pipeline that passes through Mongolia and passing through his country's territory. Doesn't this give others the chance to get stuck in our necks? Later, China and Russia's negotiations on building pipelines were temporarily shelved for a while. However, Russia was not in a hurry at that time, because it had three major natural gas buyers, Europe, Japan and South Korea, and the prices were all the highest, so Russia could make a lot of money. Then China has also begun to find another way to continuously expand natural gas import channels, try to diversify as much as possible, and avoid relying too much on the Central Asian natural gas pipeline.
Fortunately, Russia finally agreed to bypass the pipeline around Mongolia, and the cost of the pipeline bend was paid by Russia, and they paid the repair fee themselves. Putin once said that Russia has invested a total of US$55 billion in the construction of this project. In 2014, China and Russia signed a 30-year China-Russia East Line Natural Gas Agreement with a total price of US$400 billion, but Russia found that it changed a lot after starting construction, because international oil and gas prices plummeted in the second half of 2014. In 2015, the natural gas price was already lower than the contract order we signed. However, Russian gas companies have already tested half of the tests. It can be said that the market has exhausted all the operating funds of Russian gas companies and has also hit Russian companies' enthusiasm for building Eastern Line projects.
Russian companies wanted to make a lot of money from China, but they turned out to be a loss-making transaction. At that time, many people thought that if Russian companies continued to repair, they would probably go bankrupt. But this natural gas pipeline is a strategic project that China and Russia are following closely, and China has already paid advance payments. Therefore, Russian companies are in a dilemma, and in the end they have no choice but to bite the bullet and maintain it slowly. Fortunately, China suddenly had a shortage of natural gas and prices rebounded, so their construction began to accelerate. The pipeline, which was originally scheduled to be completed in 2020, was postponed until the end of 2020 and was officially put into operation. The purchase and sales volume in the first five years was 30 billion cubic meters, and from the sixth year it was 48 billion cubic meters per year.
Russia spent a lot of money on building this pipeline. Do you think they would spend all their costs on the price of natural gas? Will the price of Russian natural gas be very expensive? It depends on whom it compares. It will definitely be cheaper than Central Asia's natural gas. Moreover, this eastern line is close to our developed cities on the eastern coast, so transportation costs will be reduced. It can be said that the price of natural gas on the China-Russia Eastern Front is relatively affordable. The most important thing is that the Russian side has agreed that the share settled in RMB will increase year by year in the future. Of course, Putin has put such a lot of effort in it, just one Eastern line will definitely not satisfy his ambitions.
Some time ago, the Russian Natural Gas Company stated that they wanted to build a gas line in the western part of China and Russia, and also bypass Mongolia and enter Xinjiang, China. In this way, by 2035, Russia will become China's largest natural gas supplier.Moreover, China has become the world's largest natural gas buyer this year, and it is estimated that China's natural gas purchase volume will reach 400 billion cubic meters in three years. So you see, China's market potential is huge, so China and Russia will have greater room for cooperation in the natural gas field in the future.
However, in terms of price, Russia cannot be too expensive. Because China now has 22 natural gas import countries, we not only point to importing it from Russia, but also putting eggs in multiple baskets. This is also to avoid being stuck in others' arms.
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