Gazprom Says Russia, China Agree on Gas Pipeline

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00:00Really interesting Energy Daily yesterday. That's the newsletter that you and the team writes.

00:04And you talk a lot about this news potentially of that new pipeline being set between Russia

00:11all the way to China, potentially opening up new customers to Russia and moving away from

00:18some of the dependency on Europe. So really a potential game changer for Russia.

00:22I mean it could redraw the map of energy trade. This is all part of Russia's pivot east.

00:31It's been key for them to find new customers because the European Union will be banning all Russian gas imports by the end of 2027.

00:39Europe was once their biggest customer. But now those sales are dwindling down about 90 percent from when before the war began in

00:472022. Now for China they get dirt cheap gas. It's good for them as well. This kind of deal.

00:55Russia is offering gas supplies at a lower price than what they were selling to Europe.

01:00Clearly Russia is desperate. They need a customer. And China you know willing to lend a hand also wants a good deal of this

01:07as well. Now the details of this are still being kind of figured out. There are numerous unknowns.

01:14But that being said it does show a step forward. It's symbolic in that these countries are joining

01:21together in a way that China will depend potentially on Russian energy for decades to come as their

01:26largest supplier of gas. Yes. So really enhancing and deepening those economic ties alongside the

01:33political ties which we were discussing earlier on the show. What does this mean for the U.S.'s ambitions to

01:41dramatically increase the amount of their own gas exports. Is this going to be problematic somehow.

01:50Now if this project Power of Siberia 2 does come to fruition that will equal about 40 million tons

01:57of LNG equivalent of LNG per year you know in the 2030s. So it's not going to have an immediate impact

02:03on the market. But that 40 million tons per year put that in the context is half the demand of Chinese

02:08LNG imports just last year. So it's a very large number. Now again if this pipeline does come forward

02:16that means that Chinese LNG demand growth. They're the world's biggest LNG buyer may not rise

02:21significantly in the 2030s. And that's important because the U.S. is the world's biggest supplier of LNG.

02:27And while right now trade tension has forced China to shift away from U.S. LNG imports clearly in the future

02:34having a larger market where there are more buyers will be key to underpin a number of large projects that are

02:40kind of on the drawing board across the U.S. Gulf as well as in Alaska a project that Trump has been pushing forward

02:46pretty significantly while they haven't been able to find really any concrete buyers. So the less demand there is for LNG from China

02:55the less American exporters are essentially able to sell and enter the market. Now again not an immediate

03:03impact in the near term but it is something in the 2030s. And it is something that Trump has talked about.

03:10He wants to own energy dominance. He wants to use the weight behind him. And he wants to continue export growth

03:17well into the next decade. And that's something that could be hindered with this deal with Russia.

03:23So