by N. Peter Kramer
With apologies to Bob Dylan for using his already so often (mis)used words: ‘The Times They Are a- changin’. The song went through my head, realising that I am writing my last column as Editor-in- Chief of European Business Review. I would like to thank my readers for their patience during all these years.
Dylan’s words become even more political and powerful knowing that, at the beginning of December, Russia began supplying gas to China via a brand-new pipeline: ‘the Power of Siberia’. It is the largest gas project in history and symbolic of Moscow’s diplomatic pivot towards Beijing at a time of worsening relations with the EU for both countries. Work on the pipeline began shortly after the EU and the US introduced the first Crimea-linked sanctions against Russia. A few thousand more km of Siberian pipeline will be finished next year and the year after.
Dubbed ‘the contract of the century’ by Russian gas group Gazprom, the $55bn deal with China’s oil and gas group CNPC will allow for 38bn cubic metres of annual gas supplies to China via the 3000 km pipeline that crosses Siberia to the Chinese border in the south-east. The pipeline will allow Gazprom to increase gas exports amid declining demand and gas prices in its traditional export markets of Europe and Turkey, which buy on average about 200n cubic metres of gas a year.
For China, Asia’s largest economy, the project will help ensure its energy security amid declining domestic gas production and rising demand. It should also help combat air pollution in the coal-dependent north-eastern regions of China.
The two leaders launched the project via video, Vladimir Putin from Sochi and Xi Jinping from Beijing. ‘This is truly a historic event, not only for the global energy market, but first of all for us, for China and for Russia’, Mr. Putin said in Sochi. Mr. Xi said ‘This gas pipeline launch is an important transitional result and the start of a new stage of our co-operation’.
Whilst the EU is divided on how to cope with Russia, Vladimir Putin is strengthening his relationship with China. Mr. Xi Jinping called this development ‘a priority in our foreign policies’.
As Bob Dylan sang…