Published: Wed, December 04, 2019

Russian Federation and China launch Power of Siberia gas pipeline

Russian Federation and China launch Power of Siberia gas pipeline

The two neighbors have been forging closer relations in the past two decades amid a growing alienation for both Europe and the United States, and the Power of Siberia project is equally important for Russian Federation and China.

A 30-year purchase and sale contract for the Russian gas supply to China was signed in 2014 by Russian gas corporation Gazprom and the China National Petroleum Corporation (CNPC).

The exports are projected to generate, over three decades, $400 billion for Russia's coffers.

While Russia will have to compete with seaborne supplies of liquefied natural gas from producers such as Qatar and Australia, the expectation is that growth in China's energy needs will require more pipeline and LNG capacity.

The 3,000km-long (1864 miles) pipeline will ship gas from Russia's huge gas reserves in its eastern regions to the Chinese border.

"Russia is not only creating new income streams, but hedging its bets and bolstering its position strategically", said energy analyst Andrew Hill.

In January, Russia and Turkey will launch the TurkStream while Nord Stream-2 will boost gas output with Germany next year.

The pipeline, which Putin has called "the world's biggest construction project", crowns years of tough negotiations and work in hard conditions.

Meanwhile, Gazprom is working on finalizing another two priority gas pipeline projects.

Russian Federation and China share the same or similar position on many major global issues, Patrushev said, calling on the two sides to continue to step up coordination, safeguard their respective sovereignty and security, maintain worldwide strategic stability, promote multipolarization and democracy in global relations, and uphold global laws as well as a fair worldwide order.

Hailing bilateral ties as solid and unbreakable, Patrushev said that Russian Federation and China are comprehensive strategic partners of coordination with strategic significance, and the two countries' cooperation in various fields has reached an unprecedented level. China is the world's largest importer of oil and second-biggest buyer of natural gas.

Gazprom pressured that the pipeline ran by means of "swampy, mountainous, seismically energetic, permafrost and rocky areas with excessive environmental situations".

Gazprom CEO Alexei Miller welcomed the two leaders from the Atamanskaya compressor station on the border with China.

Temperatures along the route plunge to below minus 60 deg C in Yakutia and below minus 40 deg C in the Russian Far East's Amur Region.

Here is a list of facts to know about Power of Siberia prior to its historic launch on 2 December. Imports reached 43 percent of the total gas supply in 2018, with about two-fifths of that arriving via pipelines from Central Asia and Myanmar, with the rest sourced as LNG. Chinese companies signed a deal to take an interest in the Arctic LNG 2 project in Russian Federation earlier this year.

"It is going to by no means pay for itself", Krutikhin informed AFP.

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