Original: Shenzhen ningnanshan source: ningnanshan
In the past two days, I checked Russia’s dependence on energy exports.
As we all know, Russia is a country that relies heavily on energy exports for foreign exchange income at present, and it is not only in recent years, but also in the Soviet era a few decades ago. In the 1980s, the Reagan Administration of the United States hit the Soviet Union’s exports greatly by persuading its ally Saudi Arabia to lower the oil price in the international market, which accelerated the Soviet Union’s economic collapse.
Here I would like to say that Saudi Arabia played an important role in the process of attacking the Soviet Union, mainly in two places,
First, the increase of production capacity depressed the oil price, which hit the export income of the Soviet Union,
Second, Saudi Arabia paid for Soviet style weapons from Egypt, American style weapons from the United States, and then transported them to Afghanistan through Pakistan to support the Afghan guerrillas and the Soviet army in fighting, which greatly increased the casualties of the Soviet army and dragged the Soviet Union into the mire of war.
In short, I think that China has learned from the experience and lessons of other countries in history, and now generally maintains good relations with Middle East countries.
Russia is now at war with Ukraine, and the export of resources centered on oil and gas has become the pillar supporting the Russian economy. This makes me want to know the degree of dependence of Russia’s energy exports on the Chinese market. We assume that if Europe really reduces its dependence on Russian natural gas, what should Russia do.
I checked the following data. In terms of natural gas,
In 2021, only 6.32% of Russia’s exported natural gas was sold to China, and only 9.9% of China’s imported natural gas in 2021 came from Russia. Therefore, it is clear that there is great potential for China Russia natural gas trade.
China is very active in importing Russian natural gas for the following reasons:
1: As a clean energy, natural gas is in line with China’s long-term goal of carbon neutrality, and China’s natural gas consumption is growing rapidly.
2: China cannot be self-sufficient in natural gas. At present, one fourth of its natural gas imports come from Australia, and one third of its imports come from the United States. In the current political situation, it is China’s appeal to enhance import diversification.
3: China imports natural gas from Russia mainly through the northeast, which can stimulate investment in pipeline infrastructure in the northeast. At the same time, since all of them enter from the northeast, it can increase the import tax of the customs in the northeast. In addition, 70% of the coal and 50% of the natural gas in the three northeastern provinces need to be transferred from outside the region. The use of Russian gas can not only meet the consumption of natural gas in the northeast, but also help reduce the consumption of coal.
For Russia, as shown in the figure above, the largest export destination of its natural gas in 2021 is Germany, accounting for 19.19%, Türkiye, 10.72%, Italy, 10.38%, Belarus, 7.9%, France, 6.32%, Poland, 4.18%.
Obviously, Russia’s export destinations are “not very safe” in general, not counting Belarus and Türkiye,
The proportion of exports to developed countries in Europe is as high as 63.21%. On the whole, these countries are not only wary of Russia, but also under the leadership of the United States and within its sphere of influence.
Therefore, China should seize this opportunity to expand the opened Sino Russian natural gas pipeline and expand the transmission capacity, which can better ensure China’s energy security. Once money is invested in the construction of the natural gas pipeline, it is obviously impossible to cut off the supply casually from the economic point of view, but the return on investment will be longer, and the income and job opportunities of employees working on the existing pipeline will be damaged.
Just as Russia and Europe are interdependent in natural gas supply, once the natural gas pipeline between China and Russia is built and delivered, it is also interdependent.
In December 2019, the Sino Russian “Siberian power” natural gas pipeline was opened. Initially, it will supply China with 5 billion cubic meters of natural gas every year. When it is fully completed in 2023, the annual supply will increase to 38 billion cubic meters.
In February 2022, China and Russia signed a natural gas agreement, deciding to supply 10 billion cubic meters of natural gas to China annually through the “Siberian power” pipeline, which will increase the annual natural gas supply to 48 billion cubic meters.
The Siberian pipeline No. 2 prepared by China and Russia will pass through Mongolia and is expected to start in 2024. The annual maximum gas transmission is expected to be 50 billion cubic meters.
After the two pipelines are opened in the future, the annual gas transmission to China will reach 98 billion cubic meters, which is a very high figure. According to the data of statista, the famous “Beixi No. 1” natural gas transmission will reach 59.2 billion cubic meters in 2021, which is 4.2 billion cubic meters higher than the designed annual transmission capacity of the pipeline. According to the International Energy Agency (IEA), the total amount of natural gas imported from Russia by the EU in 2021 was 155 billion cubic meters. That is to say, the transportation volume of “Beixi No. 1” accounted for nearly 40% of the natural gas imported from Russia by the European Union in that year.
In fact, in addition to pipeline natural gas, China also imports LNG natural gas from Russia by rail.
Therefore, in the natural gas sector, China’s imports from Russia are expected to grow rapidly in the future.
In addition to natural gas, I also inquired about the proportion of Russian oil and coal exports to China. It was a little unexpected that the proportion was already very high. In 2021, 29.62% of Russia’s oil exports were actually exported to China, which is really higher than I thought. At the same time, European countries are still Russia’s largest oil exporters, with the Netherlands accounting for 13.45%, Germany for 10.29%, and European OECD developed countries accounting for 48.95%.
Among them, the oil pipeline is the main force for China to import Russian oil. The following figure shows the first phase of the Sino Russian oil pipeline. The annual oil transmission from Mohe to Daqing in China is 15 million tons,
In 2018, the second phase of the Mohe Daqing pipeline was completed, adding another 15 million tons of production capacity, making the annual oil transmission capacity reach 30 million tons.
According to the report of cnr.com, since it was put into operation on January 1, 2011, as of January 1, 2021, Mohe customs supervision service under Harbin customs had nearly 200 million tons of imported crude oil.
The following figure is the site map of China Russia oil pipeline phase II construction.
Before the completion of the Sino Russian oil pipeline, there were many twists and turns,
We can see that this line did not go this way before. The previous design was the Anda line (from Angarsk to Daqing). Of course, it was not used in the end. One of the reasons was that it could be far away from Lake Baikal to protect the environment. At that time, Japan jumped out to compete with China for this oil pipeline. As a result, in 2021, the proportion of oil exported from Russia to Japan was very small, even less than that exported to South Korea, which was 3.36%.
Finally, coal. In 2021, 23.98% of Russia’s coal exports were to China. Compared with oil and gas, Russia’s coal exports were much more balanced. The proportion of coal exported to Japan and South Korea was also 17.49%, and the total coal exported to China, Japan and South Korea exceeded 40%, while the proportion of coal exported to developed countries in Europe was 32.28%.
Therefore, Russia’s coal export is much more balanced.
Finally, in a brief summary,
1: For Russia, the largest markets for oil, natural gas and coal are all European countries. In fact, Russia attaches importance to Europe not only for cultural and ethnic reasons, but also for economic reasons.
However, even so, China has become the second largest buyer of Russia in the field of coal and oil (second only to developed countries in Europe), and China’s imports from Russia in the field of natural gas are also growing rapidly. It is expected that China will soon surpass Belarus and Türkiye and become the second largest buyer after developed countries in Europe.
2: The Russian Ukrainian war is undoubtedly a key factor. If European countries are determined to de russify oil and gas imports, we will not discuss whether they can achieve complete success here, but it is possible that the overall import of Russian oil and gas tends to decline.
I think when we analyze problems, we should still use numerical methods instead of such vague descriptions as “Europe can’t leave Gazprom” or “Gazprom can’t leave the European market”.
For example, you imported $100 worth of Russian products this year, but for reasons of resistance, you imported only $80 worth of Russian products next year. In fact, this is also de Russification, and it does not have to drop to zero to call it de Russification.
It tells us that to beautify is not to buy anything from the United States at all, but to get rid of the dependence on the core technology of the United States and avoid getting stuck. Those advanced and high-level American products should be bought or not, and how to maximize the benefits.
If the war continues, then Europe and Russia will continue to walk on the road of decoupling. Correspondingly, it is an opportunity for China to expand cooperation with Russia.
Here I want to say that the price of natural gas imported from Russia is actually very cheap, because it is mainly pipeline natural gas. The price of pipeline natural gas is half cheaper than that of LNG imported from ships at sea. Otherwise, Europeans have been using Russian pipeline natural gas for so many years.
In 2021, China’s cumulative natural gas import reached 121.36 million tons, with a total of 55.81 billion US dollars and an average price of 460 US dollars per ton.
Among them, LNG is 78.93 million tons, accounting for 65%, and the import value is 44.179 billion US dollars, accounting for 79%, with an average price of 560 US dollars per ton.
In this way, the price of pipeline natural gas is only about 274 US dollars per ton.
From January to June 2022, China’s cumulative natural gas imports reached 53.57 million tons, with an import value of US $31.667 billion and an average price of US $591.
From January to June 2022, China’s cumulative imports of liquefied natural gas reached 31.26 million tons, accounting for 58.4%, with an amount of 23.939 billion US dollars, accounting for 75.6%, and an average price of 766 US dollars per ton.
Thus, the price of pipeline natural gas is 346 US dollars per ton.
At present, Australia is China’s largest source of natural gas imports, and all of them are LNG, which is more expensive than pipeline natural gas from Russia.
We can also see that the import price of natural gas has obviously increased a lot this year. Therefore, after the Russian Ukrainian war, China also spent a lot of money on importing natural gas. Of course, as a major importer, Europe, not to mention my friends in Europe, said that their electricity bills had increased.
3: For Russia, if the largest customers of coal, oil and natural gas become China instead of Europe in the future, it will be a big psychological shock. After all, Russia has been Eurocentric for hundreds of years, but it is always not accepted by Europe, regarded as barbarians in cold and marginal areas, and not regarded as its own people. Then the biggest economic dependence gradually becomes China.
Judging from the current situation, as Europe is sanctioning Russia for de Russification, it is a relatively certain trend that China and India, which are developing, will account for an increasing proportion of Russian oil and gas exports in the short term.
Of course, if Europe is slow in de russifying its energy dependence, or if Europe and the United States offer an olive branch to Russia in the future for the purpose of containing China, a real powerful opponent, then there will be some twists and turns in this process, which depends on Russia’s strategic determination.
In short, in my opinion, the deep-rooted racism in the hearts of Westerners will never be able to regard Russians and East Asians with Chinese as the center as their own people. It must be to win over one and attack the other.
From this perspective, we are now increasing cooperation with Russia in the energy field,
On the one hand, it can increase the binding of the interests of the two countries,
The second is to give Russia economic support under the current situation of high dependence on oil and gas, so that it can continue to survive under the joint economic sanctions of the West,
This can reduce the probability that Russia will waver under the joint anti china olive branch thrown by the West in the future, and avoid creating complications on China’s road to national rejuvenation.