Original title: [Oil Observer] The expected strategic benefits and goals of "Power of Siberia"
Russia uses its abundant energy reserves to strengthen And protect its interests in neighboring countries and expand its geopolitical influence. In addition to economic benefits, the expected strategic benefits of "Power of Siberia" are more reflected at the national level. covers Russia’s mixed strategy of internal affairs, market and diplomacy.
Russia’s abundant natural gas reserves are an important pillar of Russia’s national development strategy. According to the estimation of the Russian Ministry of Natural Resources and Environment, Russia has 14.47 trillion cubic meters of natural gas reserves, worth 11.3 trillion U.S. dollars, which is equivalent to Russia's 2018 GDP 6.56 times. While maintaining and stabilizing the traditional market and expanding natural gas production, Russia is actively integrating natural gas resources and constructing the "Power of Siberia Natural Gas Transmission Pipeline" (hereinafter referred to as: "Power of Siberia") . According to the website of Gazprom, Russia began to supply natural gas to the "Power of Siberia" on December 1, 2019. In terms of route design, the "Power of Siberia" starts from the Kovikkin gas field in Irkutsk region in the west, passes through the Chayankin gas field to the Amur natural processing plant on the Russian border, and then from Blagovi Shensk is divided into two branches, one goes to Vladivostok and the other goes to China. China is the current focus of construction. "Power of Siberia" is about 3,000 kilometers long, with a gas pipe diameter of 142 cm, and a total investment budget of 55 billion U.S. dollars. According to the contract signed by the energy companies of China and Russia, through the "Power of Siberia", Russia will send 38 billion cubic meters of natural gas to China every year for the next 30 years, and the market value of Gazprom will increase after production 5 billion dollars.
In addition to economic benefits, the expected strategic benefits of "Power of Siberia" are more reflected at the national level. The European Parliament published a report entitled "Energy is a tool of Russia’s foreign policy" in April 2018, stating that “Russia uses its abundant energy reserves to strengthen and protect its presence in neighboring countries. And expand its geopolitical influence.Russia uses natural gas to punish, reward, and influence transit and consumer countries. The EU will develop a more effective foreign policy against this energy Power. "Of course, energy as a country’s foreign policy tool is not unique to Russia. The Iraq war and restrictions on energy exports from Iran and Venezuela are closely linked to the foreign policies of major powers. "Power of Siberia" is Russia's "West-East Gas Pipeline" project, and Asia is its target market. Russia will also implant its own national interests in this project. Therefore, "Power of Siberia" covers It is a mixed strategic project of Russia’s internal affairs, market and diplomacy. Its strategic objectives can be embodied as follows:
The first is to develop and stabilize the Far East. In consideration of the development and stabilization of the Far East, Russia has begun to accelerate the development of the Far East since 2014. To this end, Russia has promulgated 180 laws in the past 5 years. As of August 2019, the Russian Far East Development Corporation has signed more than 1,200 agreements with an agreement value of US$118 billion. Although Russia has made a lot of efforts, due to factors such as funding, environment, support from local interest groups, and large regional differences, insufficient infrastructure, labor shortage, resource depletion, aging equipment, water and air pollution Such issues have restricted the social and economic development goals of the Russian Far East.
In order to solve the above problems, Russia hopes to integrate oil and gas resources and its derivative industries in the eastern region to achieve increasing marginal returns. Build the "Power of Siberia" as an important pillar for Russia to promote the development of the Far East, gain more Asia-Pacific energy market share through this natural gas pipeline, and integrate the social and economic development of the Far East into the Asia-Pacific economic circle. It can be seen that if Russian natural gas smoothly enters the energy consumption end market in the Asia-Pacific region, the energy cooperation business enters the upstream and downstream, and enables the Asia-Pacific energy market to establish a strong energy dependence relationship with it, then Russia will have the opportunity to use Energy has established a political alliance with countries in the Asia-Pacific region. In this way, Russia has more political choices, thereby reducing external threats.Expand the full text
The second is to avoid potential market risks. Since the 1960s, the European gas market has been the cornerstone of supporting Russia’s economic development. In 2018, Gazprom supplied 2019 billion cubic meters of natural gas to Europe, and oil and natural gas production accounted for approximately 40% of Russia’s fiscal budget. However, the natural gas market in EU countries has gradually become saturated in recent years. Compared with 2017, Russia's supply of natural gas to Europe in 2018 only increased by 3.8%. The International Energy Agency predicts that the natural gas demand of EU countries will stay at the level of 460 billion cubic meters per year by 2035. In addition, the increase in new suppliers represented by American shale gas has also led to fierce competition in the international market for fossil fuels. In 2018, more than 600 million cubic meters of US LNG entered the EU market. The profit growth of Russian natural gas in the European market is limited, and political influence is also greatly reduced. Ekatena Lodina, an oil and gas analyst at VTB Bank in Moscow, said, “In the medium to long term, the delivery of eastern gas may be the only way for Gazprom’s production and revenue to increase. "In addition to market risks, what is even more uncertain is international political factors. The violent relationship between the United States and Russia has increased the risks of Russian natural gas in the international energy market. On July 31, 2019, the US Senate Foreign Relations Committee passed a bill to sanction companies involved in the construction of Russia’s “North Stream Pipeline-2” project. Therefore, if U.S.-Russian relations do not improve, Russia has to increase its efforts to avoid market risks, and "Power of Siberia" is Russia's best alternative to avoid market and international political risks.
The third is to form a strategic posture of "watching and helping each other" with China. Cooperating with China to develop the Far East, Russia remains very wary of the situation, but due to the impact of Western sanctions and the needs of national interests, Russia needs to strengthen its cooperation with China Cooperation in the Far East. At the 23rd regular meeting of the Chinese and Russian prime ministers in November 2018, they approved the China-Russia Far East Cooperation and Development Plan (2018-2024) prepared by the Ministry of Commerce of China and the Ministry of Development of the Russian Far East. ". During the visit of Chinese leaders to Russia in June 2019, China and Russia issued the "Joint Statement on the Development of a Comprehensive Strategic and Cooperative Partnership in the New Era". The statement clearly implemented 17 tasks. Sino-Russian energy cooperationCooperation with the Far East is listed as the 2nd and 15th projects respectively. In particular, “support the Sino-Russian East Route Natural Gas Pipeline Project to hold a production and gas supply launch ceremony within this year”. As of August 2019, Chinese companies accounted for more than 50% of foreign companies cooperating with the Russian Far East Development Corporation. Only in Russia's Far East Leap-forward Development Zone and Freeport projects, China plans to invest US$3 billion. In order to enhance economic and trade cooperation, China and Russia have listed 200 billion U.S. dollars as a new goal of economic and trade cooperation. The "Power of Siberia" and the Yamal project are critical to achieving this goal. While China and Russia are strengthening cooperation, pressure from the United States is also increasing. In January 2019, U.S. intelligence agencies jointly released the "Global Threat Assessment Report (2019)", in which the strengthening of China-Russia cooperation poses a primary threat to U.S. national security. From the perspective of large strategic space, the "Power of Siberia" is of great strategic significance for implementing the comprehensive strategic partnership between China and Russia in the new era, ensuring the national security of the two countries, and laying a solid material foundation for bilateral relations. .
Source: China Petroleum News
Xiao Bin (Research by Shanghai Cooperation Organization, Chinese Academy of Social Sciences Deputy Secretary-General of the Center, Associate Researcher of the Institute of Russian, Eastern Europe and Central Asia, Chinese Academy of Social Sciences) Return to Sohu to see more