China buys gas from Russia at half price and sells more expensive to Europe – media

Beijing came to replace Japan and South Korea when they stopped buying spot supplies from the Sakhalin-2 gas plant.

China has bought several shipments of liquefied natural gas (LNG) from Russia’s Sakhalin-2 plant at about half the current spot price. In the future, Beijing will sell this gas to Europe at a higher price. This was reported by Bloomberg with reference to traders on Friday, September 9.

The deal is beneficial for both countries: China can get cheaper supplies and resell them to Europe and Asia, while Russia can continue to sell gas at a profit, notes the newspaper.

After Russia’s massive invasion of Ukraine, Japan and South Korea, traditionally the main recipients of Sakhalin LNG, stopped buying spot supplies from the Russian Sakhalin-2 plant.

“China seems happy to accept discounted Russian LNG shipments that could be sent to Europe at higher prices,” said Sol Cavonic, an energy analyst at Credit Suisse.

Bloomberg noted that China’s imports of liquefied natural gas from Russia rose in August to the highest level in at least two years, according to ship tracking data. Meanwhile, shipments from the US fell as Chinese importers diverted shipments to Europe, earning huge profits.

Sakhalin-2 is a project on Sakhalin Island, implemented under the terms of a production sharing agreement. About 60% of the liquefied gas is destined for Japan, among the shareholders of the project operator Sakhalin Energy are two Japanese companies, Mitsui and Mitsubishi with a total share of 22.5% and Shell with a 27.5% share. The largest shareholder is Gazprom (50% + 1 share).

Recall that Gazprom has begun designing another gas pipeline in China – Soyuz Vostok. It will allow the delivery of up to 50 billion cubic meters. m of Russian gas per year to China.

Gazprom has significantly reduced gas production and exports

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