Robert HARNEIS -TDO- (FRANCE)- President Putin of Russia and Xi-Jinping, his Chinese opposite number, have launched the Power of Siberia gas pipeline. It is the first direct supply of Russian gas to China and a historic contract for Russian gas giant Gazprom.
It has taken four and a half years to build and is 2,200 kilometers long through the frozen forests of Siberia, passing under the Amur River on the Chinese frontier between the Russian city of Blagovechtchensk to the Chinese Heihe. It connects the Chayandinskoye gas fields in southern Yakutia.
It is one of the longest gas pipelines in the world and will be extended on the Russian side to the West as well as the Pacific coast. On the Chinese side it will eventually extend to Shanghai.
The pipeline construction project is linked to a contract signed in 2014 for the sale of 38 billion cubic meters of gas a year to China. It is estimated to be worth a total of 400 billion dollars and took ten years to negotiate. The decisive influence pushing Russia to agree the contract was the Western pressure on Ukraine that triggered the reunification of Crimea with Russia, which in turn caused the West to impose sanctions on Russia. The pipeline is the embodiment of Russia’s turn towards Asia to be less dependent on Europe.
The Chinese section of the project is due to be complete in 2023 when it will reach Shanghai. China is the biggest importer of fossil fuels in the world. There are already talks underway for the construction of Power of Siberia 2 which would double deliveries.
The new pipeline is one of a trio that will greatly strengthen Russia’s energy and geopolitical position. The end of 2019 will see the completion of Nord Stream 2 under the Baltic to Germany and South stream under the Black Sea to Turkey. These two pipelines will remove Russia’s dependence on Ukraine as an unreliable transit country. The completion and doubling of Power of Siberia means that Russia will no longer be totally dependent on Europe to sell its gas.
For China, the deal means less reliance on Liquified Natural Gas shipments from the US and Middle Eastern countries potentially influenced by US policy.