Russia and China have signed a new gas pipeline deal, that will supply China with natural gas. They will receive up to 50 billion cubic metres per year. The pipeline is in Mongolia and now at base stage ready to build. It will then continue into China. It is named ‘Power of Siberia-2′. This will also allow Russia to redirect gas towards China, easing the reliance of selling gas to Europe.
The European Union receives 40% of its gas imports from Russia via Ukraine and a quarter percent of its oil. On the 1st of March, the EU received 109.6 million cubic metres of gas from Russia.
With the Russia-Ukraine conflict, sanctions have been placed upon Russia by numerous western nations. This has affected Russia’s largest gas producer Gazprom and its oil company Rosneft.
Norway’s biggest energy company Equinor has retreated from trading with Russia losing assets worth $1.2b.
The Union of European Football Association (UEFA) has suspended its partnership with Gazprom effective immediately. Gazprom was the major sponsor of the UEFA Champions league, UEFA national team competitions, EURO 2024 and German football club FC Schalke. The sponsorship deal was worth 40million euro each season to the UEFA.
BP has also severed links with Rosneft. They had a stake of 25% in the company, and once it dumped its holdings, lost $25b immediately.
UK oil giant Shell is selling all its stakes in all joint ventures with Gazprom. A gas facility with 27.5% holdings, 50% in an oilfield project in Siberia and an energy venture. Their involvement in the Nord stream pipeline between Russia and Germany will also cease.
These losses will affect the world on a consumer and European business level. Petrol prices will rise in the U.S.
Malaysian oil and gas company Petronas will be taking a neutral stance as they have a non-operated stake in Gazprom. They will not be making any hasty decisions. They have an oilfield in Iraq, dealing with Rosneft with an estimated 3 million barrels in place. The CEO of Petronas, Taufik stated ‘we will be a responsible, reliable and committed energy producer to serve our customers and partners everywhere during this period, where prices will be volatile.’
Gazprom and Rosneft are Russia’s most profitable economic businesses.