Pipelines to China

"On Tuesday, March 21, Russia has promised to build two natural gas pipelines to China and to become one of the country’s biggest gas suppliers over the next decade. The agreement has created certain uneasiness in Europe, which fears that it should expect more cuts in deliveries of Russian gas, particularly since some of the gas headed to China would be tapped in Western Siberia, at the fields that supply Europe.

Russia has the world’s largest reserves of natural gas and is the biggest gas producer. Analysts, quoted by the British Financial Times, said that Moscow appeared to be playing Europe — which relies on Russia for 70 percent of its gas — and China, Russia’s largest potential customer, off against each other.

Sergei Kupriyanov, a spokesman for state-controlled natural gas monopoly Gazprom, said on Tuesday: “Gazprom will fulfill all its current contracts and obligations to Europe. However, the future increases in gas supplies to Europe — in response to its growing demand — will be subject to arbitrage between China and European countries.”

But the massive scale of Russia’s promises to China raised questions about whether it would deliver on yesterday’s accord. The pipelines would cost up to $10 billion to build and, under the agreement, Russia would supply China and the Asia Pacific region with 60-80 billion cubic meters of gas, twice China’s total consumption in 2004.

A pipeline from Western Siberia would go through Russia’s region of Altai to China’s western border. The first gas could flow to China as early as 2011."

Source: Mosnews.com