Russia’s plan to build a new gas pipeline to China has been scrapped due to financial conditions imposed by China that Russia could not accept. China only wanted to buy a fraction of the pipeline’s capacity, leading to the collapse of the project. The gas pipeline was seen as important for the Russian economy, especially as the natural gas export market has shrunk.
According to reports from the Financial Times, Russia could not agree on the price at which China demanded to buy natural gas, resulting in the cancellation of the project. Additionally, China was only willing to purchase a portion of the pipeline’s capacity, which further contributed to the project’s failure. The agreement to build the gas pipeline was a key issue discussed between Russian President Vladimir Putin and Chinese President Xi Jinping during a visit to Beijing.
The collapse of the project is seen as a significant setback for Russia, as it relied heavily on selling energy to Europe. With the contraction of the natural gas export market and the war in Ukraine disrupting plans, Russia now has to find new markets for its energy and potentially sell it at lower prices. Economists suggest that the failure of the gas pipeline project will have long-term consequences for the Russian economy, with the impact of the war in Ukraine likely to linger for some time.