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Putin commits to gas for China Countries have not yet reached agreement on oil pipeline China wants, but Russia will finance feasibility study; no timetable yet for construction to deliver Siberian oil Mike Eckel Associated Press Writer
Russian President Vladimir Putin announced plans March 21 to step up energy supplies to China with a new gas pipeline network opening within five years, but there was no word of an agreement on a separate pipeline sought by Beijing to deliver Siberian oil to its exploding economy.
A Russian minister said Moscow would finance a feasibility study for the oil pipeline and can’t offer a construction timetable until the study is done.
The announcements came after Putin and his Chinese counterpart, Hu Jintao, met for the fifth time in less than a year and pledged to promote political and trade ties between the former Cold War enemies, which say their relations are at their best point ever.
Beijing wants to secure access to Russian oil and gas, while the two sides have built up a political alliance to counterbalance U.S. dominance in global affairs.
The pipeline network will deliver up to 80 billion cubic meters (2.8 trillion cubic feet) of gas annually, Putin told reporters. Two routes for gas “Two routes have been determined — an eastern one and a western one,” Alexei Miller, the chief executive of Russia’s OAO Gazprom gas monopoly, was quoted as saying by the NTV television channel.
Miller said the eastern route would supply gas from eastern Siberia as well as fields off the far east island of Sakhalin, while a western route would send gas from Russia’s west Siberian fields.
A Gazprom source who spoke on condition of anonymity told The Associated Press that the western route would cross a section of the Russia-Chinese border to the west of Mongolia from the Altai region and was tentatively slated to come on line in 2011.
The Interfax news agency quoted a Russian official visiting China as saying the pipeline could cost up to US$10 billion, but Dow Jones Newswires said that it could cost between US$3 billion and US$5 billion.
Moscow and Beijing want to spur investment and double last year’s US$29 billion in trade by 2010. China gets Russian oil by rail China is a leading buyer of Russian oil, which for now is delivered by railway tank car, and is the top foreign customer for Moscow’s arms industry.
Many observers had expected news about the 4,100-kilometer (2,550-mile) Siberian pipeline to the Pacific coast. Both Tokyo and Beijing have maneuvered hard to secure a favorable routing.
“There can be no talk of `when’ until a feasibility study is completed,” said Viktor Khristenko, Russia’s minister of industry and energy.
In a 13-page statement, Putin and Hu pledged to promote links between their energy, telecoms, transportation and other industries.
Putin endorsed China’s claim to Taiwan, the self-ruled island that Beijing says it part of its territory.
“The sides express decisive support for one another’s policies and actions in the questions of defending state sovereignty, unity and territorial integrity,” the statement said. “Russia will continue the policy (supporting) ‘one China’ declared by the Chinese government ... and Taiwan is an indivisible part of China.”
Putin tried to assuage concerns about deepening Russian-Chinese ties.
“Our relations serve not only as factors for geopolitical stability,” he said in a speech Tuesday evening to Chinese and Russian dignitaries in the Great Hall of the People, the seat of China’s parliament.
“They demonstrate an example of open international partnership, which is not directed at any third country and serves to help develop a more perfect system of peace,” he said. Western reserves already stretched thin Putin said gas for the new pipeline would come from fields in both eastern and western Siberia.
But the commitment might be a politically motivated promise that Moscow can’t keep, because western Siberian reserves are already stretched thin, according to Valery Nesterov, oil and gas analyst with the Troika Dialog investment bank in Moscow.
“I don’t see where Russia in the foreseeable future can pile up these resources,” he told The Associated Press.
Nesterov said the announcement might be meant to strengthen Moscow’s bargaining position with European gas buyers who might want to find other suppliers after its spat with Ukraine over prices.
“Russia is saying it has markets. In a way, it’s a form of pressure on Europe,” he said.
Miller insisted that Europe would remain Gazprom’s main export market.
“The European market was, is and will be the main market for Gazprom. The company will always honor in full the long term contracts that we have today and the contracts that we will sign.”
Putin was accompanied by a 90-member delegation of leaders of Russia’s state-owned Rosneft oil company and Gazprom gas monopoly, as well as aircraft, telecommunications and other industries.
China and Russia have pledged commitment to a “multipolar world” and last year warned other nations against attempts to dominate global affairs and interfere in sovereign nations’ domestic matters.
The Hu-Putin meeting comes after Washington released a foreign policy review the week of March 13 that expressed dismay at rollbacks in democratic reform in Russia and warned China against denying personal and political freedoms.
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