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Monday, December 16, 2019

Explained: Why a gas pipeline from Russia to China matters

On Monday, Chinese and Russian Presidents Xi Jinping and Vladimir Putin inaugurated the first cross-border pipeline between their countries, called the “Power of Siberia”. What is this project?

By: Explained Desk | New Delhi | Updated: December 4, 2019 7:53:13 am
The central aim of this gas pipeline is to pump natural gas to China and Russia’s far-east regions. (Representational Image)

On Monday, Chinese and Russian Presidents Xi Jinping and Vladimir Putin inaugurated the first cross-border pipeline between their countries, called the “Power of Siberia”. Gas supply to China via this pipe has started.

The project

The central aim of this gas pipeline is to pump natural gas to China and Russia’s far-east regions. In May 2014, state-owned companies from Russia and China, Gazprom and the China National Petroleum Corporation (CNPC), signed a $400 billion deal for the delivery of 38 billion cubic metres of natural gas annually for a period of 30 years. The Chinese section of this pipeline is over 3,371 km long from Heihe in northern China to Shanghai. Construction for this segment started in September 2014. According to official Chinese data, China consumed about 276.6 billion cubic metres of natural gas in 2018. Overall in 2018, China imported about 45 per cent of the natural gas it consumed in 2018.

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The over 4,000 km gas pipeline has an annual capacity of over 61 billion cubic metres and passes through wetlands, mountainous terrains, seismically active zones, areas of permafrost and rocky ground. According to Gazprom, by 2022 it will start receiving gas from one more location in eastern Russia, in addition to its present source in Yakutia in Eastern Russia.

“The Power of Siberia gas pipeline and the new gas production centers in eastern Russia provide additional opportunities for the acceleration of socio-economic development in eastern regions, primarily through gas grid expansion,” Gazprom said in a press release.

Why it is important

For China, the significance of the pipeline project is that it will feed its industries, which are mostly situated in the north. They are trying to move away from coal to cleaner alternatives; the pipeline supply will help secure its demand for energy security.

Additionally, China is in talks with Russia over two more pipelines: the Power of Siberia 2 that will supply over 30 billion cubic metres annually to China’s western border with Russia, and another pipeline from Sakhalin island, which may become a part of Russia’s export route to Japan, South Korea and China.

For Russia, on the other hand, the pipeline project signals the country’s pro-China sentiment.

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