The EU has reportedly been buying natural gas from China at a premium, which has in turn been buying its gas from Russia.
According to Hong Kong-based news outlet the South China Morning Post, the Chinese government bought 2.35 million tonnes of liquefied natural gas in the first half of 2022 – 28.7% more than the year prior.
China snaps up over US$2 billion of Russian LNG as energy trade bucks economic downturn https://t.co/xG0eVOAg3o
— South China Morning Post (@SCMPNews) July 21, 2022
This was reportedly purchased for $2.16 billion at the time, but has appreciated in value by 182% as energy becomes more scarce globally.
While all this was taking place, China’s imports from other LNG suppliers like Indonesia and the US declined, making Russia the biggest LNG supplier to the Chinese state.
This is significant, as a report from the Financial Times last week outlined how China has been selling its surplus LNG to Europe, as the continent scrambles to source its gas needs from suppliers other than Russia.
China throws Europe an energy lifeline with LNG resales https://t.co/0bGWth3kC5
— FT China (@ftchina) August 29, 2022
Amid the ongoing war in Ukraine, with Russia slashing Europe’s gas supplies to a 40-year low, the EU is now becoming heavily reliant on Beijing instead to meet its energy needs, and is buying the gas at a higher price than it was initially purchased.
While this will reduce dependence on Russian gas, it may create a new dependency on the Chinese Communist state in its place.
As of this week, Russia has switched off Europe’s main gas pipeline entirely until the sanctions against it are lifted, according to the Kremlin.
— Al Jazeera English (@AJEnglish) September 5, 2022