China’s summit with Russia and North Korea this week and the military parade that followed contained plenty to shock, from new missile technologies and drone submarines to what appeared to be autonomous robot wolves. But investors in energy may notice a different threat: potential progress on a new Russia-China natural gas pipeline that could, if it goes ahead, leave US suppliers out in the cold.

The Power of Siberia 2 pipeline is a huge project that would bring 50bn cubic metres of natural gas to China per year, starting perhaps in the early 2030s. Such infrastructure investments are usually backed by a decades-long supply contract which binds buyers and sellers. 

The issue for other countries is that cheaper Russian imports to China — in volumes that could increase to 60 bcm if some extensions on other routes are factored in — would displace much of the liquefied natural gas China was expected to buy from elsewhere. The potential flows are roughly equivalent to the amount the UK consumes, and would meet a big chunk of China’s expected demand growth of about 150 bcm in the period, as estimated by Bernstein analysts.