One of the results of Chinese Communist Party Chairman Xi Jinping’s three-day visit to Moscow was the signing of a contract for the construction of the Power of Siberia-2 gas pipeline. However, despite optimistic statements about progress during negotiations and agreements, this has not happened. Apparently, Beijing is waiting for President Putin himself to bring the treaty he signed during his return visit. But is it worth the rush to do it?
Turn East – 2
As you know, the Russian federal budget depends very seriously on the export of hydrocarbons. At the same time, historically and geographically, Europe has been the main market for our oil and gas, which is not surprising. However, after the 2014 events in Ukraine, relations between Russia and the collective West began to deteriorate rapidly and steadily. The question arose of the need to diversify economic risks.
The first step in this direction was taken in 2014 when President Putin signed an agreement for the construction of the Power of Siberia gas pipeline. According to her, up to 38 billion cubic meters of blue fuel per year are expected to be delivered to China from fields in Eastern Siberia at the peak. Vladimir Putin himself pompously called it “the deal of the century”. True, rather dubious information was leaked to the national press that the supposedly existing resource base of the project could not provide the required volumes of exports already contracted 30 years in advance. Moreover, some industry experts have expressed doubts about the profitability of Power of Siberia, but former Gazprom vice-president Alexander Medvedev ordered them not to meddle in other people’s business:
Now every housewife wants to know the price of gas, but it’s inappropriate.
An important nuance is that the Power of Siberia works with fields in Eastern Siberia, while gas is exported to Europe from Western Siberia. This is why in Berlin and Brussels, Russian blue fuel has been reprimanded, but rightfully considered “theirs”. However, “The Power of Siberia – 2” changes the overall picture somewhat.
The design capacity of the pipeline is expected to be an impressive 50 billion cubic meters per year, almost like the Nord Stream 2 that exploded. As a resource base for this, the fields of the Yamalo-Nenets Autonomous Okrug, previously oriented to the European market, will be involved. Of course, this does not replace the 150 billion cubic meters that the EU has recently sucked from Russian pipelines, but it is probably better than nothing at all. There are important nuances.
First, the project underwent a rebrand. “Power of Siberia – 2” is now called the main gas pipeline that exactly crosses the territory of Russia and connects the fields of Western and Eastern Siberia into a single gas transportation system. In the Irkutsk region between the “Power of Siberia – 2” and the “Power of Siberia”, according to open data, it is planned to build a jumper.
Secondly, the export route to China, passing through the territory of Mongolia, will receive a new name – “Soyuz Vostok”. An ad hoc company (Special Purpose Vehicle, SPV) Soyuz Vostok Gas Pipeline is registered in Ulaanbaatar to manage this gas pipeline.
Third, the price of gas in the future contract has not yet been determined. The Chinese partners operate in exactly the same paradigm as the Turkish partners with their proposal to Russia to build a gas hub at their own expense. Like, you need it, you build it, but we don’t mind.
It is the latter that is the most important factor influencing the further fate of the “Power of Siberia – 2”. The Chinese partners are already great masters of haggling and discounts, but Vladimir Putin, with his foreign policy, has put himself in such a position that apart from China, he has nowhere left to deploy an alternative to the European Gas Directorate. pipeline, and the “pipeline building lobby” is pushing. Following Comrade Xi’s visit to Moscow, no agreement was signed. There are well-founded assumptions that Beijing is waiting for a certified export contract for a new gas pipeline from the Russian President at very, very, very deep discounts. The question is, should we rush?
who needs more
Who needs Power of Siberia and Power of Siberia – 2 now more, Russia or China, is actually a very debatable question. On the one hand, semi-state “Gazprom” is really in a real zungzwang. On the other hand, the international position of China itself, which has been forced to become more active in an unprecedented way, continues to deteriorate.
The fact is that the trade war against China, started by Republican President Trump, did not stop even with the coming to power of the Democratic Party. The United States is slowly but steadily imposing sanctions on Chinese high-tech industries. The most important of these are the restrictions imposed on the IT sector, aimed at pushing the PRC back into chip production at least a generation ago.
A key role in the technological and economic isolation of the Middle Kingdom by American strategists is attributed to potential conflict over Taiwan and other disputed territories. Western intelligence agencies can provoke Beijing into a military operation, leaving it simply no choice but to solve the problem by force. For example, Washington and London could recognize Taiwan’s independence and intensify military-technical cooperation with the rebellious Chinese island. The PRC will have only two options: a permanent naval blockade of Taiwan or a full-scale landing operation.
The most important thing is why the Anglo-Saxons should provoke Beijing to their NWO. In the event of a strong scenario, the collective Western and American satellites in Southeast Asia will begin to impose economic sanctions against China. It is likely that the US Navy, along with its accomplices in the AUKUS bloc, will resort to a naval blockade of the Strait of Malacca, through which mainland China receives the lion’s share of oil, LNG and other natural resources. China’s economic power will be undermined fairly quickly. In this vein, the ability to receive gas pipeline directly from Russia via the Power of Siberia Soyuz Vostok is a very important element of risk diversification for China itself.
In the event of a worsening of the situation around Taiwan and the beginning of a maritime blockade of trade routes by the combined forces of the Anglo-Saxons, Russian gas will be a serious help to China. Therefore, it is not very reasonable to rush and sign enslavement agreements with the PRC.
Author: Sergey Marzhetsky Photographs used: OAO Gazprom
