Tuesday, April 10, 2018

Big, Big Money: The 'Power of Siberia’ gas pipeline to China could be global game changer

Discerning reader will notice a bit of chauvinism in the writer's point of view, up to and including the estimated cost. But even if you knock the figure down 75% to $100 billion, the undertaking is still large-by-large.
Here's Gazprom's map of what's up in the Russian Far East:

http://www.gazprom.com/f/posts/74/805991/map_sila_sib_e2017-05-18.png
From RussiaFeed:
This $400 billion project cutting its way through untamed wilderness is looking to cut right through the world energy balance of power

President Vladimir Putin and China’s Vice Premier Zhang Gaoli enthusiastically broke ground on the “Power of Siberia” natural gas pipeline on September 1st, 2014.

And since then, the project connecting Yakutia’s vast gas reserves to energy-hungry China has been barreling its way through larges stretches of Siberian wilderness.

Undertaken by Russia’s state gas company Gazprom, it represents a $400 billion investment and could turn global energy politics on its head.

Construction began at a fortuitous time. It was in 2014 that Europe and America began the current economic sanctions efforts directed at Russia, forcing Moscow to at least reconsider the feasibility of doing long-term business with its western “partners.”

Fortunately, Beijing was all to willing to fill the gap. The pipeline thus represents a larger reorienting of Russia away from Europe and toward Asia – a move not so much chosen by Moscow as forced by Washington and Brussels – but one which is probably in Moscow’s best interest.

So while American client states like Poland and Lithuania line up to buy greatly overpriced LNG from US sources, China is more than happy to “buy Russian” – the choice which makes the business sense. (We know the Chinese are good businessmen. The Poles? Well they just plopped down $4.75 billion on an outclassed 30-year old air defense system – but hey, at least it’s not Russian.)

Once the world’s biggest untapped energy reserve – Russia – and the world’s biggest producer – China – are bound by this umbilical cord, it could have economic and political repercussions Europe and America never predicted when they forced the two together....MORE