Monday, December 14, 2009

New Pipeline From Central Asia Feeds China




MOSCOW — With the turn of a ceremonial valve, China’s president, Hu Jintao, opened a big natural gas pipeline from central Asia to China on Monday, significantly boosting China’s access to the fuel and providing the first major alternative to exporting the region’s gas through Russia.

The ambitious project runs 1,140 miles across three Central Asian nations to the Chinese border, linking Turkmenistan to the Chinese province of Xianjiang. Once inside China, it connects with a pipeline that can carry the fuel even farther to the east.

Though helpful to energy-parched China, the project siphons potential supplies from the long-delayed pipeline that the European Union would like to see built from Turkey to central Europe. Such a project could also tap sources of natural gas in Turkmenistan, a stark illustration of the overlapping energy interests at play in the region.

For the China pipeline, Turkmenistan says it can supply 40 billion cubic meters of gas for 30 years once the line reaches full capacity, China Daily, an official English-language newspaper, reported. That is about the equivalent of half of China’s current consumption of natural gas.

The pipeline is the first major export corridor for natural gas out of the region that does not pass through Russia. It breaks from the Soviet-era design of a Eurasian pipeline system built to supply eastern Europe via Russia to the north of Central Asia. The new pipe revives a pre-Sovietr view of trade in the region, in which economic exchanges flow both east and west, not just through Russia.

“The startup of this pipeline reconstructs the ancient Silk Roads and symbolizes friendship and cooperation,” Kazakstan’s president, Nursultan Nazarbayev, said at the ceremony Monday, Interfax reported.

Mr. Hu was in Turkmenistan to turn the symbolic wheel that signaled the start of gas transported along the pipeline. An inauguration ceremony was also held on Saturday in Kazakhstan for that country’s part of the project.

China’s accomplishment was all the more notable because Europe and the United States have been jousting with Russia for years to break its natural gas pipeline monopoly.

Alexander Cooley, an authority on Central Asia at Barnard College in New York, said China succeeded because it did not blend energy ventures with support for democratic change in the region, or demands for access to the military bases the United States needs to help wage the war in Afghanistan, as was the case with the Western powers.

These other Western policy goals in Central Asia served only to stiffen Russian opposition to European and American oil and gas ventures, which fed into Russia’s fear of being encircled by Western interests in the region, he said.

Russia also acquiesced to the Chinese because the pipeline poses far less of an immediate threat to the business of Gazprom, the big Russian gas monopoly, than a westbound pipe would, according to Vitaly Y.

Yermakov, research director for Russia and the Caspian for IHS CERA.

Russia’s paramount goal is to prevent the West from breaking a monopoly on natural gas pipelines from Asia to Europe, which is the core of Gazprom’s business. The eastbound Chinese pipeline, in contrast, does not undercut an existing Russian export market, since Russia sells no pipeline gas to China now; talks on a Russia-to-China pipeline have been bogged down for years in a dispute over pricing.


Edward Wong contributed reporting from Beijing

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