China, Russia launch massive joint gas pipeline

Nellie Chapman
December 4, 2019

The two countries can jointly tap potential markets and "Russian companies could also build gas transmission grids and underground gas storage in China with their unique expertise in the field", Belogorey said.

Russian Federation has the world's largest proved gas reserves, making it an attractive and logical option for China, mainly due to price and geographical proximity.

The Power of Siberia pipeline is a "project of symbolic importance for China-Russia cooperation", said Xi, who expressed hope that the pipeline will become a driving force for economic and social development in the regions it traverses.

The pipeline serves as a model of.mutually beneficial cooperation between our countries, Xi said.

Gazprom has stressed that the pipeline ran through "swampy, mountainous, seismically active, permafrost and rocky areas with extreme environmental conditions".

Xi called it "a landmark project of China-Russia energy cooperation and a paradigm of deep convergence of both countries' interests and win-win cooperation".

Moscow's pivot towards Asia for gas exports comes at a time when Europe has been diversifying its supplies away from Russian Federation, following western sanctions being imposed on Russian Federation following the crisis in Ukraine that started in 2014.

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Investors piled into government bonds, driving the yield on the 10-year US Treasury note to a one-month low near 1.7 percent. But Chinese officials have never confirmed an agreement was imminent and have said the talks remain ongoing.

They spoke on phone Monday afternoon after witnessing the launch ceremony of the China-Russia east-route natural gas pipeline, Chinese state media reported.

Russian Federation and China have been moving closer, determined to counter US global power. Officials in Kazakhstan, which borders both Russian Federation and China, have already voiced their interest in getting in on the action.

Named the "Power of Siberia", the pipeline runs more than 8,100 kilometers (5,000 miles) across the two countries, according to Chinese state-run news agency Xinhua, and will deliver 38 billion cubic meters of natural gas annually by 2024. He warned that such an approach would only harm those nations.

Gazprom chief Alexey Miller said 10,000 workers took part in the construction of the pipeline, which used 130,000 pipes. "Now the main direction of our gas and oil is Europe". The pipeline expected to feed it, a 670 km project called Coastal GasLink has been in the works since 2012, but mainline construction is only set to begin between 2020 and 2021. But the project could be frustrated if threatened USA sanctions against companies laying the pipeline are imposed. For example, previously most Russian gas exports went to Europe. The current agreement, negotiated in 2009, expires at the end of the year.

TASS said that deliveries had started flowing through the pipeline as of Monday, although the amount will start small and then ramp up over the years.

The project also threatens to undercut China's traditional suppliers such as Australia, which has had an increasingly fraught relationship with Beijing in recent years.

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