Rosenberg: Putin enjoys Xi's Chinese welcome but heads home without pipeline deal
BBC editor Steve Rosenberg writes that Vladimir Putin's visit to Beijing ended without a 'Power of Siberia 2' pipeline deal despite the dazzling diplomatic welcome. The Chinese side avoided agreeing on long-term offtake pricing. The economic substance is not moving at the same speed as the geopolitical embrace.
BBC editor Steve Rosenberg reports from Beijing that Vladimir Putin clearly enjoyed every minute of the four-hour ceremonial programme staged by Xi Jinping, but he left the visit without a concrete deal on the Power of Siberia 2 gas pipeline. Rosenberg writes that, despite the spectacle of speeches and panels in front of the cameras, China avoided locking in a long-term offtake price.
Kremlin spokesman Dmitry Peskov said the visit was a 'historic step'; Beijing's foreign ministry only noted that 'the parties are continuing talks'. The pipeline would carry up to 50 billion cubic metres of natural gas a year from Siberia to China. As Europe pivots away from Russian gas, it remains a strategically critical project for Moscow.
Client notes from Goldman Sachs and Citi say that China is strengthening its hand by watching falling spot LNG prices on the global market. The next formal round is expected in Shanghai in September. European traders will be watching daily fluctuations in gas prices closely.
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