Thread by @AlexGabuev

THREAD Looking for some unlikely winners of recent breakdown in U.S.-China trade talks? They include Vladimir Putin and @Gazprom. Here is how it works 👇1/

2/ A 🇨🇳🇺🇸 trade deal, just delayed (more likely) or indefinitely killed (unlikely), would include large volumes of US oil and LNG exports going to China as part of deficit reduction measures. These shipments will now come later or not come through at all. bloomberg.com/news/articles/…

3/ China will still need to import more hydrocarbons, in particular natural gas. Demand may go up to 376bcm/y, according to @IEA. Switch in power generation from coal to gas is driving the process, and the trend is likely to continue iea.org/gas2018/

4/ Beijing was trying to diversify sources of gas imports over the last 20y, and Russia was on its way to become an important player in Chinese gas market anyway. US-China debacle may add urgency to this quest.

5/ The easiest way for Russia to boost gas exports to China is expansion of Power of Siberia pipeline that will be operational later this year. Max capacity is 38 bcm/y (to be reached in 2025) as agreed in 2014 by @Gazprom and @CNPC, but Russia can easily add at least 6 bcm/y

6/ At BRI forum in April, Putin said that Xi has asked him to expand Power of Siberia, and that Russia will do so. Additional gas will come from Kovykta gas field, and all @Gazprom will need to do is to add booster stations to the pipeline kommersant.ru/doc/3960017

7/ @Gazprom will also need to expand the Amur gas processing plant that will extract ethane and helium and turn them into chemical products. Chinese companies including @SinopecNews and CGGC are subcontractors to the project gazprom.com/projects/amur-…

8/ From what I hear, this additional Sino-Russian gas contract may be signed already in early June when Xi comes to Russia to attend @SPIEF if both parties manage to finalize details. Putin and Xi didn't sign anything in Beijing, so expect a package of deals to be signed in SPB

9/ Another opportunity is the Western route (Altay, Power of Siberia -2), 30 bcm/y, but differences on the price remain. Nevertheless, Moscow now may see this as an opportunity to reopen the talks - particularly given the challenges that @CNPC run into in Turkmenistan in 2018

10/ In addition to pipeline gas, Russia is busy selling the Chinese stales in new LNG projects like Arctic LNG deal signed in April ft.com/content/f7c328…

11/ Unlike in the energy domain, when it comes to agriculture Russia is unlikely to benefit from US-China spat due to internal limitations. For example, see this excellent piece by Ivan Zuenko for @CarnegieRu carnegie.ru/commentary/774…