Tue, Dec 03, 2019 - Page 7 News List

Putin and Xi launch first Russia-China gas pipeline, as Moscow hedges its bets

AFP, MOSCOW

An employee checks a gas valve at the Atamanskaya compressor station, part of Gazprom’s Power Of Siberia gas pipeline outside Svobodny, Russia, on Friday last week.

Photo: Reuters

Russian President Vladimir Putin and Chinese President Xi Jinping (習近平) on Monday launched the first gas pipeline linking the two countries.

“Today is remarkable, a truly historic event not only for the global energy market, but first of all for you and us, Russia and China,” Putin said during a televised ceremony featuring the two leaders.

Russia is also planning soon to launch two more gas pipelines that would ramp up supplies to Europe, while bypassing Ukraine.

TurkStream, which Putin and Turkish President Recep Tayyip Erdogan hope to launch next month, is to transport Russian gas to Turkey.

Nord Stream-2, which would double Russian gas volumes to Germany, is expected to go online in the middle of next year.

Analysts said that the three projects have long-term economic and political benefits for Russia, which has inserted itself between European markets to the west and the rapidly growing Chinese market to the east.

“Russia is not only creating new income streams, but hedging its bets and bolstering its position strategically,” energy analyst Andrew Hill wrote in a blog post.

“The ability to play one off against the other will not have been lost on either Gazprom or the Kremlin,” said Hill, who leads the S&P Global Platts EMEA gas and power analytics team.

He said that the three projects were a sign that the Russian gas industry — “this kingpin of the global gas sector” — was becoming more mature.

Putin spokesman Dmitry Peskov said that the significance of the 3,000km Power of Siberia pipeline running from remote regions of East Siberia to Blagoveshchensk on the Chinese border was hard to overestimate.

“This is important for our country; this is important for China,” he said ahead of the launch, stressing that the project would create jobs and infrastructure in Russia’s Far East.

The pipeline, which Putin has called “the world’s biggest construction project,” crowns years of tough negotiations and work in difficult conditions.

A 30-year, US$400 billion deal was signed in 2014 after a decade of tortuous talks. It was the Russian gas giant Gazprom’s biggest contract.

Speaking in Moscow last week, Chinese Vice Minister of Foreign Affairs Le Yucheng (樂玉成) said the pipeline would boost cooperation and allow the two countries “to complement each other’s strengths and pursue common rejuvenation.”

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