First of three Russian gas pipelines inaugurated

Russian President Vladimir Putin and Chinese leader Xi Jinping launch Monday a gas pipeline that is the first of three ambitious projects intended to cement Moscow’s role as top gas exporter.

Putin and Xi are to inaugurate by video link-up the “Power of Siberia” pipeline, sending Siberian gas to China in a move that will strengthen their ties amid Moscow’s confrontation with the West.

Russia is also planning to soon launch two more gas pipelines that will ramp up supplies to Europe while bypassing Ukraine.

TurkStream, which Putin and Turkish leader Recep Tayyip Erdogan hope to launch in January, is to transport Russian gas to Turkey.

Nord Stream-2, which would double Russian gas volumes to Germany, is expected to go online in mid-2020.

Analysts said the three projects have long-term economic and political benefits for Russia, which has inserted itself between European markets to the west and the rapidly growing Chinese market to the east.

“Russia is not only creating new income streams, but hedging its bets and bolstering its position strategically,” said energy analyst Andrew Hill.

“The ability to play one off against the other will not have been lost on either Gazprom or the Kremlin,” Hill, who leads the S&P Global Platts EMEA gas and power analytics team, wrote in a blog post.

He said the three projects were a sign that the Russian gas industry – “this kingpin of the global gas sector” – was becoming more mature.

Putin’s spokesman Dmitry Peskov said the significance of the 3,000-kilometer (1,850-mile) Power of Siberia pipeline running from remote regions of East Siberia to Blagoveshchensk on the Chinese border would be hard to overestimate.

“This is important for our country, this is important for China,” he said ahead of the launch, stressing that the project would create jobs and infrastructure in Russia’s Far East.

‘Biggest project’

The pipeline, which Putin has called “the world’s biggest construction project,” crowns years of tough negotiations and work in difficult conditions.

A 30-year, $400 billion deal was signed in 2014 after a decade of tortuous talks. It was the Russian gas giant Gazprom’s biggest contract.

Gazprom is to supply China with 38 billion cubic meters (1.3 trillion cubic feet) of gas annually when the pipeline is fully operational in 2025.

Gazprom stressed that the pipeline runs through “swampy, mountainous, seismically active, permafrost and rocky areas with extreme environmental conditions.”

Temperatures along the route plunge below minus 6o degrees Celsius in Yakutia and below minus 40 C in the Russian Far East’s Amur Region.

Speaking in Moscow last week, Chinese vice foreign minister Le Yucheng said the pipeline would boost cooperation and allow the two countries “to complement each other’s strengths and pursue common rejuvenation.”

Ahead of the launch, officials also said work had been completed on the first road bridge between Russia and China.

The bridge, which is to open next year, will connect the city of Blagoveshchensk and the northern Chinese city of Heihe.

The Power of Siberia launch comes amid continued wrangling over Nord Stream 2.

The 9.5-billion-euro ($10.6-billion) pipeline has faced opposition from countries in eastern and central Europe, the United States and particularly Ukraine because it is likely to increase Europe’s dependence on Russian natural gas.

US President Donald Trump has threatened to hit Nord Stream 2 and those tied to it with sanctions.

While praising Russia’s gas projects with China and Turkey, Thierry Bros, an energy analyst at the Davis Center for Russian and Eurasian Studies at Harvard, said the Baltic energy link had become a victim of strong opposition from many in the West.

“Nord Stream 2 is not a success,” he told AFP, noting that it was hard to say when Gazprom would be able to fully capitalise on its investment.

Here’s a quick rundown of the three pipelines:

Power of Siberia

Billed by Russian President Vladimir Putin as “the world’s biggest construction project,” the giant pipeline will send Siberian gas to China.

The 3,000-kilometre (1,850-mile) pipeline runs from remote regions of eastern Siberia to the city of Blagoveshchensk on the Chinese border.

Gazprom is to supply the world’s fastest-growing market with 38 billion cubic metres (1.3 trillion cubic feet) of gas annually when the pipeline becomes fully operational in 2025.

The 30-year, $400 billion deal was signed in 2014 after a decade of tortuous talks. It was the Russian gas giant’s biggest contract.

The pipeline was built in extreme environmental conditions and runs through swampy, mountainous and permafrost areas.

Nord Stream 2

Despite years of tensions Europe currently remains Russia’s primary customer.

The pipeline runs under the Baltic Sea and is set to double shipments of Russian natural gas to Germany, the EU’s biggest economy.

It has an annual capacity is 55 billion cubic metres (bcm).

Half of the 9.5-billion-euro ($10.6-billion) project is financed by Gazprom, with the rest covered by its European partners: Germany’s Wintershall and Uniper, Anglo-Dutch Shell, France’s Engie and Austria’s OMV.

The project has been denounced by the United States and countries in eastern and central Europe, particularly Ukraine.

They fear it will increase Europe’s reliance on Russian energy supplies which Moscow could then use to exert political pressure.

US President Donald Trump has threatened to hit Nord Stream 2 and those tied to it with sanctions.

Russia had hoped to unveil the pipeline in late 2019 but the launch has been delayed due to difficulties in obtaining the permits from Denmark.

In October, Copenhagen gave Russia a permit to build a section of the pipeline on the Danish continental shelf in the Baltic Sea.

Russian Deputy Prime Minister Dmitry Kozak told reporters last month that he expected the pipeline to become operational in mid-2020.

TurkStream

Turkey is one of Russia’s key customers.

Russia supplies gas to Turkey via the  Blue Stream and Trans-Balkan gas pipelines.

Running under the Black Sea, the new TurkStream pipeline consists of two lines — the first is intended for Turkish consumers, while the second will send gas to southern and southeastern Europe.

Each has an annual capacity of 15.75 billion cubic metres.

Putin and Turkish leader Recep Tayyip Erdogan hope to unveil the pipeline in January.

Like Nord Stream 2, it will bypass Ukraine.

In comparison to the Power of Siberia and the Baltic energy link, the construction of the TurkStream pipeline benefited from a better climate.

The project symbolises close ties between NATO member Turkey and Russia which overcame a major rupture in 2015 following the downing of a Russian fighter jet.

In 2016, after a meeting between Putin and Erdogan in Saint Petersburg earlier that year, Russia and Turkey signed an agreement to build the TurkStream pipeline. Construction began in 2017.

–AFP