China accepts roubles and yuan for Russian gas: Gazprom, the largest energy company in Russia, has announced that it has signed an agreement with China to begin making payments for gas supplies to China in yuan and roubles rather than dollars. This development is a positive sign for relations between Beijing and Moscow, which is currently subject to sanctions from the West.
Following a video conference meeting with the head of China’s oil group CNPC, Dai Houliang, the CEO of Gazprom, Alexei Miller, was quoted as saying in a statement that “the new payment mechanism is a mutually beneficial, timely, reliable, and practical solution.” Miller’s words were included in the statement that followed the meeting.
Miller went on to say that it will “make computations easier” and “become a wonderful example for other businesses.”
According to a statement released by Gazprom, Miller communicated with his Chinese counterpart regarding “the status of work on the project for gas supply via ‘the eastern route’ – the ‘Power of Siberia’ gas pipeline.” This pipeline will connect the Russian and Chinese gas networks.
Gazprom did not disclose any additional information regarding the scheme or specify when payments will switch from dollars to roubles and yuan.
The modification is being made as part of an effort to lessen Russia’s reliance on the United States dollar, the euro, and other hard currencies. This effort is being hastened by sanctions imposed by the West in reaction to the conflict in Ukraine.
Recently, Russia has been making efforts to create stronger economic connections with China and other non-Western countries. These efforts have been ongoing.
At the beginning of this year, Russian President Vladimir Putin demanded that European clients continue making payments in roubles and open bank accounts with Gazprombank in roubles if they wanted to continue receiving gas from Russia. The supply was shut off to certain businesses and countries that failed to comply with the terms of the arrangement, which resulted in an increase in the cost of energy.
Late in 2019, it began sending gas to China through the Power of Siberia gas pipeline, which is 3,000 kilometers long and 1,865 miles long. Putin lauded the decision as a “genuinely historical event, not only for the global energy market but above all for us, for Russia and China,” as he praised the significance of the move.
The energy conglomerate announced that gas from the undeveloped Kovykta field will begin flowing through the Power of Siberia pipeline “before the end of the year.” This will make it possible to “raise the volume of gas deliveries to China in 2023.”