Energy: New oil and gas routes spell the end of post-Soviet political wrangling
Cold War tensions between Russia and Europe will persist as long as the Cold Warenergy infrastructure stays in place. However, a lattice of new pipelines should make relationships more civlilized.
Cold War pipelines are still in place, but a raft of energy infrastructure deals and the launch of several important new routes signal major shifts in thepost-Sovietoil and gasnetwork.Russia’s imperialistic hold over producers in Central Asia—inherited from the Soviet Union in the form of oil and gas pipelines—has been broken. A new gas pipeline running from the gas-rich republic of Turkmenistan to China is a game changer and joins an oil pipeline snaking from oil-rich Kazakhstan to China that is already in operation.
The Kremlin’s response has been to build more pipelines, also headed east. The result of this emerging lattice of pipelines is that energy relations in the regionwill become more civilized as competing routes will force both buyer and seller to put market interests first and politics a definite second.
On December 14, 2009, China's President Hu Jintao joined his Turkmen counterpart, Gurbanguly Berdimuhamedow, toinaugurate the new TransAsian pipelinethat allowsenergy-hungry China to tap Central Asia's copious supplies of gas.
“The new pipeline marks an economic power shift to the benefit of three Central Asian countries and China and to the detriment of Russia,” said Philip H. de Leon, the publisher of OilPrice.com.
The TransAsian pipeline cost $6.7 billionto build and is the first gas pipeline out of the Caspian Region that runs east, linking Turkmenistan’s massive gas basin with China’s West-East Gas Pipeline. The pipeline will carry up to 40 billion cubic meters (bcm)of gasby 2013, accounting for half of China’s gas needs.
China’s growing importance in the region has gotten the attention ofthe Kremlin: Prime MinisterVladimir Putin signed a deal that promises to deliver 68 bcm a year to China through two new pipelines starting in Siberia.These pipelineswill provide China with the other half of the gas it needs. The Russian deal represents an abrupt about-face for the Kremlin, which has traditionally been very wary of its eastern neighbor.
Pipelines are intensely political beasts when they are in the planning stage, but once constructed they are the geopolitical equivalent of marriage.
The Turkmen gas pipeline follows on the heels of a new Kazakh oil pipeline to China that rounds out the new eastward-looking energy transport infrastructure. The first phase of the Kazakh oil pipeline went into operation in July last year and a second phase will link Kazakhstan’s rich Caspian oil resources to China.
The two Chinese pipelines have raised the ante in the energy game for Russia and broken its monopoly on the transport of oil and gas to customers out of the region in Western Europe. However, the Kremlin is striking back by beefing up its own energy transport infrastructure.
Underpinning the annual clash between Russia and Ukraine is the fact that Russia is forced to send about 80 percentof its gas to Western European customers through Ukraine.
Russia has proposed two new routes that run to the north and south of Ukraine to diversify the supply routes: The Nord Stream runs from Northwest Russia to Germany and the South Stream runs from Southern Russia under the Black Sea to Turkey. Much of Western Europe was cut off from crucial gas supplies when Russia clashed with Ukraine over unpaid gas bills. Futurebattles with Ukraine over money will be just that and 2009 should be the last time European countries faced the prospect of being cut off from their gas heating in the depths of winter.
With the gas transport problems well in hand, the Kremlin has turned its attention to rounding out the oil pipeline infrastructure. Like the Russian gas pipes that will now run both east and west, Putin relaunched a new and ambitious Eastern Siberia–Pacific Ocean (ESPO) oil pipeline that will run from Siberia to Russia’s Pacific coast.
The 4857-kilometer ESPO pipeline is by far the longest and most expensive of all the pipeline plans. Strategically it will allow Russia to deliver oil directly to the whole of the Pacific Rim and significantly diversify Russia’s customer base. Construction of this anaconda of a pipe was begun in April 2006, but the project has only recently regained momentum.
The success of the pipeline will depend on the currently untouched oil resources thought to exist in Eastern Siberia; serious exploration of the region will begin this year.
W.P
http://www.washingtonpost.com/wp-adv/advertisers/russia/articles/business/20100223/pipe_dreams_come_true.html
Cold War tensions between Russia and Europe will persist as long as the Cold Warenergy infrastructure stays in place. However, a lattice of new pipelines should make relationships more civlilized.
Cold War pipelines are still in place, but a raft of energy infrastructure deals and the launch of several important new routes signal major shifts in thepost-Sovietoil and gasnetwork.Russia’s imperialistic hold over producers in Central Asia—inherited from the Soviet Union in the form of oil and gas pipelines—has been broken. A new gas pipeline running from the gas-rich republic of Turkmenistan to China is a game changer and joins an oil pipeline snaking from oil-rich Kazakhstan to China that is already in operation.
The Kremlin’s response has been to build more pipelines, also headed east. The result of this emerging lattice of pipelines is that energy relations in the regionwill become more civilized as competing routes will force both buyer and seller to put market interests first and politics a definite second.
On December 14, 2009, China's President Hu Jintao joined his Turkmen counterpart, Gurbanguly Berdimuhamedow, toinaugurate the new TransAsian pipelinethat allowsenergy-hungry China to tap Central Asia's copious supplies of gas.
“The new pipeline marks an economic power shift to the benefit of three Central Asian countries and China and to the detriment of Russia,” said Philip H. de Leon, the publisher of OilPrice.com.
The TransAsian pipeline cost $6.7 billionto build and is the first gas pipeline out of the Caspian Region that runs east, linking Turkmenistan’s massive gas basin with China’s West-East Gas Pipeline. The pipeline will carry up to 40 billion cubic meters (bcm)of gasby 2013, accounting for half of China’s gas needs.
China’s growing importance in the region has gotten the attention ofthe Kremlin: Prime MinisterVladimir Putin signed a deal that promises to deliver 68 bcm a year to China through two new pipelines starting in Siberia.These pipelineswill provide China with the other half of the gas it needs. The Russian deal represents an abrupt about-face for the Kremlin, which has traditionally been very wary of its eastern neighbor.
Pipelines are intensely political beasts when they are in the planning stage, but once constructed they are the geopolitical equivalent of marriage.
The Turkmen gas pipeline follows on the heels of a new Kazakh oil pipeline to China that rounds out the new eastward-looking energy transport infrastructure. The first phase of the Kazakh oil pipeline went into operation in July last year and a second phase will link Kazakhstan’s rich Caspian oil resources to China.
The two Chinese pipelines have raised the ante in the energy game for Russia and broken its monopoly on the transport of oil and gas to customers out of the region in Western Europe. However, the Kremlin is striking back by beefing up its own energy transport infrastructure.
Underpinning the annual clash between Russia and Ukraine is the fact that Russia is forced to send about 80 percentof its gas to Western European customers through Ukraine.
Russia has proposed two new routes that run to the north and south of Ukraine to diversify the supply routes: The Nord Stream runs from Northwest Russia to Germany and the South Stream runs from Southern Russia under the Black Sea to Turkey. Much of Western Europe was cut off from crucial gas supplies when Russia clashed with Ukraine over unpaid gas bills. Futurebattles with Ukraine over money will be just that and 2009 should be the last time European countries faced the prospect of being cut off from their gas heating in the depths of winter.
With the gas transport problems well in hand, the Kremlin has turned its attention to rounding out the oil pipeline infrastructure. Like the Russian gas pipes that will now run both east and west, Putin relaunched a new and ambitious Eastern Siberia–Pacific Ocean (ESPO) oil pipeline that will run from Siberia to Russia’s Pacific coast.
The 4857-kilometer ESPO pipeline is by far the longest and most expensive of all the pipeline plans. Strategically it will allow Russia to deliver oil directly to the whole of the Pacific Rim and significantly diversify Russia’s customer base. Construction of this anaconda of a pipe was begun in April 2006, but the project has only recently regained momentum.
The success of the pipeline will depend on the currently untouched oil resources thought to exist in Eastern Siberia; serious exploration of the region will begin this year.
W.P
http://www.washingtonpost.com/wp-adv/advertisers/russia/articles/business/20100223/pipe_dreams_come_true.html
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