China is intensifying its energy cooperation with Russia by preparing a second import terminal to receive liquefied natural gas (LNG) from the sanctioned Arctic LNG 2 project, according to a report by Reuters available at https://www.reuters.com/business/energy/china-lines-up-second-lng-terminal-sanctioned-russian-cargoes-sources-say-2026-06-22/. This development marks a significant attempt by Moscow to circumvent Western sanctions following the collapse of its European energy exports.
The new facility, located in Longkou, Shandong province, is operated by the state-owned PipeChina. It is expected to begin accepting LNG shipments by October, just in time for the peak winter heating season. This infrastructure expansion is vital for Russia, as it aims to sustain the operational capacity of Arctic LNG 2, which is designed to produce 19.8 million tonnes of gas annually.
Currently, China remains the sole major buyer of the project’s output. Since August 2025, the Beihai terminal has already processed significant volumes, much of which were transferred via floating storage units to mask the origin of the shipments. Despite these efforts, Russia continues to struggle with the economic consequences of its aggression, having to offer deep discounts—often 30% to 40%—to entice Chinese buyers. This reliance on a single market underlines the systemic weakness of the Russian energy sector under the pressure of international isolation.
Logistically, Longkou is a strategic choice due to its proximity to the ‘Koryak’ floating storage unit in the Russian Far East. PipeChina is also considering the Dalian LNG terminal as a potential future hub for Russian cargo, indicating that Beijing is planning for long-term dependence on these discounted resources. While Russia seeks to pivot entirely to Asian markets, analysts argue that these trade relationships are becoming increasingly lopsided, with Moscow forced to sell its assets at increasingly unfavorable terms. As the global energy landscape shifts, the collaboration between China and Russia serves as a clear illustration of how geopolitical alliances are being leveraged to sustain a war-depleted economy, even at the cost of long-term economic stability.