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China-Russia Gas Project Takes Off
Oct 15, 2014

China and Russia have begun implementing their $400 billion mega-gas deal—a strategic project that would allow Russia to lower its dependence on the European market, and open prospects of tapping the growing energy demand in the Asia-Pacific.

Russia’s eastward shift is anchored by the agreement to supply China 38 billion cubic meters of gas every year for 30 years. Gas flows will commence in 2018 after the lengthy Siberia Power Pipeline, having both Russian and Chinese components, gets completed.

Recently, the Chinese side froze the design and construction plan on its side for the pipeline, which will start in northeast China’s Heilongjiang province and terminate in Shanghai, China’s premier commercial and industrial hub. Construction is expected to start next year, covering three main segments before the pipeline terminates in Shanghai three years later.

Work on Russian segment of the pipeline, linking Siberia’s Kovyktin and Chayandin gas fields with the eastern port city of Vladivostok—a distance of 4,000 km—commenced last month.The new gas pipeline will significantly strengthen Russia’s economic cooperation with the governments of the Asia-Pacific region and, first and foremost, with China. The Russians are planning to invest $55 billion in building infrastructure and further exploring Siberia’s energy resources, to consolidate their outreach to Asia via China.

The two countries are already upscaling their energy ambitions by negotiating additional supplies, which could double proposed energy flows from Siberia along an additional western route. 


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