Russian expert: in China, Turkmen gas is the main competitor of Russian

Russian expert: in China, Turkmen gas is the main competitor of Russian

Turkmen gas is the main competitor of Russian gas in the Chinese market. This was stated in an interview to Izvestia by the head of the School of Oriental Studies of the National University Higher School of Economics Alexei Maslov.

Commenting on the start of Russian pipeline gas supplies to China on the Power of Siberia, he noted that theoretically Russia could cover up to 20% of China’s gas needs, but Beijing is unlikely to allow this. According to him, China does not allow anyone to occupy a market share of above 12% for any type of product. In addition, according to Maslov, China is currently negotiating with Turkmenistan to expand gas supplies. “So Turkmenistan is our main competitor in this market,” the expert said.

Finama analyst Aleksey Kalachev also emphasized that Russian gas can occupy no more than 10% of the Chinese market, “since China is actively diversifying its blue fuel sources, purchasing LNG around the world, buying Turkmen gas and producing about half of the required volume itself.”

The fact that China will continue to use the tactics of preserving several gas suppliers so as not to depend on one, was also mentioned by Sergei Lukonin, head of the Chinese economy and politics sector at IMEMO RAS. According to him, before the launch of the Power of Siberia, Turkmenistan was the leader in gas supplies to China. In 2018, the country supplied China 35.5 billion cubic meters of gas, with exports increasing by 8-9% every year. According to him, gas to China comes from Uzbekistan in the amount of 6.9 billion cubic meters, Kazakhstan – 6.2 billion cubic meters. Lukonin emphasizes that the Power of Siberia will not be able to interrupt these supplies, but the construction of the second branch of the Power of Siberia-2 gas pipeline is possible.

I must say that the estimates of Russian experts here are somewhat different from the estimates of foreign analysts, including Chinese, who believe that the main competition in the Chinese gas market will take place between pipeline and liquefied gas.

For example, Jin Lei, a professor at China University of Petroleum, said that LNG producing countries would face serious difficulties with the launch of the Power of Siberia, and Australia in particular, since the advantage of pipeline gas in price would be squeezing the LNG market. According to him, in the future, the needs for LNG will be limited, since most of the necessary gas will be supplied by gas pipelines.