Russia and China to Develop New Arctic Shipping Hubs, Putin Says During Xi Meeting

Russia and China are looking to further expand their cooperation in Arctic shipping and energy projects, President Putin confirmed during a meeting with Chinese leader Xi in Moscow.

“Significant progress has been made in the development and commercial use of the Northern Sea Route,” Putin stated during a joint press conference. 

Since the full-scale invasion of Ukraine, Arctic shipping traffic on the Northern Sea Route has been dominated by Russia-China trade. Last year 95 percent of cargo on the route flowed between the two countries.

“The volume of cargo and passenger traffic between Russia and China is growing year after year, the capacity of border crossings is increasing, some of which have been converted to a 24-hour operation mode. New logistics hubs are being created,” Putin continued.

The development of Russia’s Arctic logistic routes has been a personal project of Mr. Putin for much of the past two decades. He regularly attends the launch of new nuclear icebreakers, opening of polar military facilities, and commissioning of oil and gas projects.

“We will continue to keep all aspects of the Russian-Chinese partnership under constant personal control,” Putin confirmed the importance of China as an Arctic partner. Both countries attach great importance to the development of international transport corridors covering the entire Eurasian continent, Putin confirmed.

Trade between the two countries has doubled since 2020. China now ranks first in trade turnover with Russia, setting a new record of USD 245 billion in 2024. Creation of a network of banks, known as the “China Track,” has helped bypass Western sanctions. 

Crude oil and liquefied natural gas (LNG) transported via Arctic shipping lanes has been a key contributor to expanding trade volumes.

“The volume of liquefied natural gas supplies from Russia to China is also increasing,” Putin highlighted. 

But recently LNG exports to China have plateaued as Western sanctions have put the Arctic LNG 2 project in deepfreeze. Chinese buyers have been reluctant to openly buy sanctioned Russian LNG in violation of U.S. sanctions. 

Efforts to create an LNG shadow fleet to escape the watchful eyes of the OFAC sanctions office have thus far not proven successful for Russia. There have been no deliveries from the Arctic LNG 2 project since it began operating in August 2024..

Discussions to overcome those hurdles and to expand Chinese involvement in Russia’s LNG project continued during the Moscow meetings on the ministerial level.

“The topic of China’s entry into Russian liquefied natural gas (LNG) projects is currently being discussed at the Russian-Chinese summit in the Kremlin,” Russian Energy Minister Sergei Tsivilev confirmed according to the Interfax news agency.

“This is currently being discussed,” he said, answering a question about whether Chinese companies could enter new LNG projects in Russia.

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