By Swann Collins, investor, writer and consultant in international affairs. Eurasia Business News, September 6, 2022

Gazprom and China’s CNPC are converting payments for Russian gas supplies via the Power of Siberia pipeline into rubles and yuan, reported the Russian company.

Buyers from unfriendly countries have to pay for Russian gas with the mandatory conversion of currency into rubles since Marc. Only after that the buyer’s obligation to pay is considered fulfilled. Turkey already agreed to pay partially in ruble for gas supplies.

On Tuesday, within the framework of the Eastern Economic Forum 2022, a working meeting was held via video conferencing between Alexey Miller, Chairman of the Gazprom Management Committee, and Dai Houliang, Chairman of the Board of Directors of CNPC, the Chinese oil giant.

During the meeting, additional agreements were signed on the long-term Gas Purchase and Sale Agreement for the Eastern Route. In particular, the transition to settlements for the supply of Russian gas to China in the national currencies of the countries – rubles and yuan – was recorded“, reported Gazprom.

The new payment mechanism is a mutually beneficial, timely, reliable and practical solution. I believe that it will simplify the calculations, will be an excellent example for other companies, will give an additional impetus to the development of our economies,” said Alexey Miller in the press release.

Deliveries of Russian gas to China from the Chayandinskoye field in Yakutia through the Power of Siberia pipeline began at the end of 2019, the first five years are devoted to increasing volumes to 38 billion cubic meters per year.

In 2021, Gazprom supplied 10.39 billion cubic meters to China via this highway, exceeding the contract values by 390 million cubic meters.

This move is another step in the dedollarization of the Russian and Chinese economies.

Russia and China have been working since 2014 on building an alternative international currency system. They are now working on implementing de-dollarization of the economies of the BRICS. Moscow and Beijing are expected to use their large gold reserves and mining potential to implement their program. India joined them in 2022, as New Delhi agreed to buy Russian oil in rubles and rupees.

In May, Gazprom reported that gas exports to China have grown by almost 60% since the beginning of the year. In July and August, the Russian company also reported that supplies to China continue to increase.

The Russian businessman Arkady Rotenberg said today at the Eastern Economic Forum in Vladivostok that :

“The turn to the East has already taken place, it is just necessary to do it more extensively […] it is necessary to fully enter the Chinese market. […] The world has changed today, it will not come back. There will be no such thing as there was a unipolar world. Globalization is over.”

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