Russia Began to Supply Gas to China at Record Low Prices
OREANDA-NEWS. Since the beginning of 2021, the cost of delivering Russian gas to China via the Power of Siberia gas pipeline has dropped to a minimum - below $ 120 per thousand cubic meters. This is evidenced by the data of the General Administration of Customs of the PRC, to which Interfax refers.
Russia began to supply fuel at record low prices due to the specifics of the contract. Its formula is tied to the cost of fuel oil and gas oil with a lag of nine months, which, in turn, is tied to oil prices.
The gas price changes every quarter, that is, it will be revised in April. But at present, supplies are several times cheaper than the market average.
So, in January of this year, the average price for liquefied natural gas (LNG) in Asia was $ 587 per thousand cubic meters, and Russian LNG went to China at $ 487. In Europe, the average gas price on the spot market was $ 257 per thousand cubic meters.
In the first quarter, China receives Russian gas even cheaper than Belarus, which has to pay $ 128.5. Gas went to Europe at a price of $ 170. At the same time, Tajikistan sells its fuel to China for $ 187, Kazakhstan for $ 162, and Uzbekistan for $ 151.
Against this background, China has sharply increased the purchase of Russian gas. The actual monthly volume of supplies for February 2021 was 3.2 times more than for February 2020. Meanwhile, last year, when prices were higher, Russia was unable to realize even the minimum planned volume.