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Russia Cements Role As Gas ‘Kingpin’ with Three New Pipelines

MOSCOW – Russian President Vladimir Putin and Chinese leader Xi Jinping unveiled a gas pipeline on Monday, the first of three ambitious projects aimed at cementing the position of Moscow as the top gas exporter.
Putin and Xi will inaugurate the “Power of Siberia” pipeline by video, sending Siberian gas to China in a move that will reinforce their relations in the dispute between Moscow and the West.
Russia also plans to launch two more gas pipelines in the near future, which will raise supplies to Europe while bypassing Ukraine.
TurkStream, to be unveiled in January by Putin and Turkish leader Recep Tayyip Erdogan, is to carry Russian gas to Turkey.
Nord Stream-2 is expected to go online in mid-2020, which would double Russian gas volumes to Germany.
Analysts said the three ventures have long-term economic and political benefits for Russia, which has put itself between Western European markets and East China’s rapidly growing market.
“Not only does Russia create new income streams, but it hides its bets and strategically bolsters its position,” energy analyst Andrew Hill said.
“Neither Gazprom nor the Kremlin will have lost the ability to play one off against the other,” Hill, who heads the EMEA Gas and Power Analytics team of S&P Global Platts, wrote in a blog post.
He said the three projects were a sign of the increasing maturity of the Russian gas industry— “this kingpin of the global gas sector.”
Putin’s spokesman Dmitry Peskov said it was impossible to overestimate the importance of Siberia’s 3,000-kilometer (1,850-mile) power pipeline running from remote areas of East Siberia to Blagoveshchensk on the Chinese frontier.
“This is important for our country, this is important for China,” he said before the release, stressing that in Russia’s Far East, the project will create jobs and infrastructure.
The pipeline, which Putin called “the largest construction project in the world,” crowns years of hard negotiations and working under difficult conditions.
After a decade of tortuous negotiations, a 30-year, $400 billion deal was signed in 2014. It was the largest contract for the Russian gas company Gazprom.
Gazprom is supplying China with an annual gas of 38 billion cubic meters (1.3 trillion cubic feet) when the pipeline is fully operational in 2025.
Gazprom emphasized that the pipeline was running through “swampy, mountainous, seismic, permafrost and rocky areas with extreme environmental conditions.”
Temperatures along the route drop below minus 6 ° C in Yakutia and below minus 40 ° C in the Amur region of Russia’s Far East.
Speaking in Moscow last week, Chinese Vice Minister of Foreign Affairs Le Yucheng said the pipeline would improve cooperation and allow the two countries “to complement each other’s strengths and seek mutual rejuvenation.”
Officials also said work on the first road bridge between Russia and China had been completed prior to launch.
The bridge, to be opened next year, will connect Blagoveshchensk’s city with Heihe’s northern Chinese city.
Launching Siberia’s Power comes in the midst of continued quarrels over Nord Stream 2.
The €9.5 billion ($10.6 billion) pipeline has faced opposition from countries in Eastern and Central Europe, the United States, and particularly Ukraine, as it is likely to increase Europe’s reliance on Russian natural gas.
US President Donald Trump threatened to hit Nord Stream 2 with sanctions and those linked to it.
Thierry Bros, an energy analyst at the Davis Center for Russian and Eurasian Studies at Harvard, while praising Russia’s gas projects with China and Turkey, said that the Baltic energy link had become a victim of strong opposition from many in the West.
“Nord Stream 2 is not a positive,” he told AFP, adding that when Gazprom could completely build on its investment, it was hard to say.
(Sahar News Monitoring Desk)

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