China and Russia may set up energy alliance, Moscow’s top envoy says

[beijingwalker]

China and Russia may set up energy alliance, Moscow’s top envoy says

• Ambassador in Beijing Andrey Denisov also hails military cooperation between the two countries

PUBLISHED : Wednesday, 12 December, 2018, 11:00pm

China and Russia are looking into setting up an energy alliance, Moscow’s top envoy to China said on Wednesday, as they seek closer ties amid growing pressure from the United States.

Speaking in Beijing, Russian ambassador to China Andrey Denisov also hailed military cooperation between the two countries over the past year. He highlighted Vostok 2018 in September, Russia’s biggest war games in nearly 40 years that involved almost 300,000 Russian troops and 3,000 from China, saying it “reflected the high-level mutual trust on politics”.

“Given the large scale of the exercise, it’s difficult to make it regular, but normal military contact will continue,” Denisov said.

Russia, under sanctions over its annexation of Crimea and the alleged attempted murder of a former spy and his daughter in Britain, has been edging closer to Beijing in recent years, raising suspicions in Washington.

Denisov said trade between the two neighbours was expected to reach US$110 billion this year – about 70 per cent of which was from energy.

“Russia is willing to work with China on long-term and stable supply cooperation in the energy industry,” Denisov said at the embassy’s annual press conference. “If China partners with Russia, [both sides will] benefit from healthy development in bilateral ties and establish a security network [on energy].”

Facing severe air pollution from burning coal and a growing dependence on imports for its energy supply, Beijing has been seeking to buy more from Russia – one of its top suppliers of crude oil and natural gas.

As part of those efforts, an extension of the East Siberia-Pacific Ocean oil pipeline between Russia and China went into operation in January, doubling the export volumes from 15 to 30 million tonnes a year – or almost 220 million barrels, Denisov said.

Meanwhile, a 3,000km pipeline – seen as Russia’s most ambitious, costly and geopolitically critical energy project since the fall of the Soviet Union – is expected to start pumping 38 billion cubic metres of gas a year from eastern Siberia to eastern China from next December, he said.

Li Lifan, an associate professor at the Shanghai Academy of Social Sciences, said energy cooperation with China was part of Russian President Vladimir Putin’s Asia pivot, as Moscow sought to diversify its market because of Western sanctions limiting its options in Europe.

In addition to the gas pipeline running from eastern Siberia, Beijing and Moscow are also negotiating over a western route that would supply 30 billion cubic metres of Russian gas annually to China.

“Talk of an energy alliance could be a sign that the western route deal may be wrapped up very soon,” Li said.

The Russian ambassador’s remarks come as Beijing and Washington are locked in a trade war, with China imposing a 10 per cent tariff on US liquefied natural gas (LNG) imports in September after US President Donald Trump announced punitive tariffs on US$200 billion of Chinese imports.

China has since agreed to start importing more US agricultural, energy, industrial and other products, according to the White House. But Li said it remained uncertain whether LNG – a market now dominated by Qatar and the United States – would be on Beijing’s US shopping list.
https://www.scmp.com/news/china/dip...ay-set-energy-alliance-moscows-top-envoy-says
“Importing natural gas from Russia could also impact the price of American LNG, because pipeline gas is relatively cheap – and as China is a key importer of LNG in east Asia, this could also further suppress the price of LNG,” Li said.

https://www.scmp.com/news/china/dip...ay-set-energy-alliance-moscows-top-envoy-says

 

[beijingwalker]

Russia to Enhance Energy Alliance with China
© Sputnik / Sergey Guneev
BUSINESS
02:05 13.12.2018

Russia sees it has become much more important to forge an energy cooperation alliance with China to meet the interests of both sides and secure energy networks, Andrey Denisov, Russia's Ambassador to China, said at a press conference on Wednesday.

As a major consumer of energy products, China buys oil and liquefied natural gas (LNG) and Russia is a major supplier of those products, so a tie-up between the two countries will help establish secure energy relations, Denisov said during the conference held in Beijing.

The two countries have seen significant progress in further enhancing bilateral relations in 2018, and "this special bond could enable us to tackle all the problems," of increased external pressure, Denisov noted.

Bilateral trade volume surpassed $97 billion from January to November, an increase of 28 percent year-on-year. And it will reach and exceed the stated target of $100 billion, the ambassador said.

Since January 1 this year, a second line of the China-Russia oil pipeline began operating, with a total volume of 30 million tons per year.

China and Russia are being pushed toward an energy partnership by economic factors, as Russia is a resource behemoth and China has seen its energy consumption rapidly surge in recent years. "Enhancing this partnership with China is a long-term strategy for the Russian government," Li Li, director of research at the Shanghai-based research and consulting firm ICIS China, told the Global Times.

Other milestone projects in their energy links include Novatek's Arctic LNG project. The third phase has been finalized with a total capacity of 16.5 million tons.

In summer 2018, the first LNG shipment was made from the Russian port of Sabetta, home to the Yamal LNG project in the Russian Arctic, to the Chinese port of Rudong in East China's Jiangsu Province, according to media reports.

Meanwhile, the eastern route for Russian gas exports to China will be finalized next year, and natural gas deliveries will commence on December 20, 2019, the ambassador said. "It will be the largest energy cooperation in terms of scale and will deliver 38 billion cubic meters of natural gas per year," he said.

China and Russia have been settling bilateral trade in the yuan and ruble, but about 15 percent of the trade settled in the currencies was in sectors such as agriculture and machinery, Denisov noted. "We hope this payment mechanism can be extended to other industries, for example, the energy sector," he said.
https://sputniknews.com/business/201812131070635883-china-russia-energy-alliance/

 

[vostok]

I suppose Russia, China, Japan and S. Korea want to make huge energy ring - unite electrical systems to reduce cost of electricity.

 

[Tshering22]

I suppose Russia, China, Japan and S. Korea want to make huge energy ring - unite electrical systems to reduce cost of electricity.

South Korea and Japan are doubtful as they are still completely reliant on US foreign policy and cannot have their own say. South Koreans may be open to buying power from you guys, but nothing to strategic as:

1. it would piss off North Koreans, who are important allies to Russia and China
2. US wouldn't allow it.

Forget Japan. They just won't get involved in something this strategic. You'd rather have the chance of current Ukraine to normalise ties with you and join such as Eurasian alliance rather than Japan.

 

[rambro]

I suppose Russia, China, Japan and S. Korea want to make huge energy ring - unite electrical systems to reduce cost of electricity.

Japan and SK sovereignty is only by name they are totally dictated by US regime in their foreign relations. Atleast for now it is.

 

[oprih]

Great news! For the benefit of both Russia and China!

 

[GeraltofRivia]

South Korea and Japan are doubtful as they are still completely reliant on US foreign policy and cannot have their own say. South Koreans may be open to buying power from you guys, but nothing to strategic as:

1. it would piss off North Koreans, who are important allies to Russia and China
2. US wouldn't allow it.

Forget Japan. They just won't get involved in something this strategic. You'd rather have the chance of current Ukraine to normalise ties with you and join such as Eurasian alliance rather than Japan.

A lot of work is already happening for supplying Russian gas to China, South Korea and Japan. The pipeline on the east coast of Siberia is called Sakhalin-Khabarovsk-Vladivostok pipeline. It is nicely positioned to supply SK and Japan via LNG or seabed pipeline.

The most significant part of the Russian pipeline network is naturally the “Power of Siberia”, which will transport 1.3 trillion cu ft gas from Russia to China. The pipeline is close to completion and will start to send gas at the end of 2019.

On the western section, there is another gigantic pipeline called Altai pipeline sending gas into China.

 

[nahtanbob]

South Korea and Japan are doubtful as they are still completely reliant on US foreign policy and cannot have their own say. South Koreans may be open to buying power from you guys, but nothing to strategic as:

1. it would piss off North Koreans, who are important allies to Russia and China
2. US wouldn't allow it.

Forget Japan. They just won't get involved in something this strategic. You'd rather have the chance of current Ukraine to normalise ties with you and join such as Eurasian alliance rather than Japan.

it would be in russia's interest to have multiple customers. it might be in USA's interest to make that happen