MOSCOW. (RIA Novosti political commentator Dmitry Kosyrev)
The commissioning of a Kazakh-Chinese oil pipeline this month was an event of global importance. It is the first eastward pipeline from Kazakhstan, which had supplied its oil only to the West before. And it is the first pipeline oil China will receive.
For Russia, the pipeline is part of its eastern economic policy, which is gaining importance in Moscow.
The nearly 1,000 km long Atasu-Alashankou pipeline will deliver up to 20 million tons of oil a year to the Xinjiang Uygur province of China. The province, which is located closest to the European part of Russia, had been regarded a dormant and underdeveloped part of China. The situation has changed.
The conclusion is that processes of interest to Moscow are gathering momentum there and Moscow is actively involved in them. Prior to the construction of the pipeline, oil exports to China were minimally beneficial to Russia (disregarding deliveries by rail across the Russian Far East). However, oil trade with China promises huge returns, because China needs up to 150 million tons of crude a year and spent $50 billion on oil imports last year.
Russia has become the top global hydrocarbons supplier, pushing aside Saudi Arabia. China, which is a direct neighbor of Russia, receives up to 80% of its oil imports by sea, via the Strait of Malacca, and mostly from the Middle East. This is a high-risk situation for China also because it owns only one of the ten tankers that carry its oil.
The Pacific pipeline, or rather its leg delivering oil from East Siberia to China's northeast province, was considered crucial for the Russian oil sector. It is a huge project that needs joint investments into pipeline construction and oil exploration in East Siberia. Its route was determined only recently, and will pass a respectable distance from Lake Baikal, which is an environmental preserve. In other words, this is a major project that will change the outlook of Eastern Russia and will take years to accomplish.
Meanwhile, the northwestern oil pipeline to Xinjiang has been built in less than two years and cost "only" $700 million. Most importantly, this is not a single Kazakh-Chinese project but the beginning of a policy of creating a new pipeline system, in which not only Russia but also several Central Asian states will participate in one way or another.
The supply of Russian raw materials to the northwestern provinces of China was discussed during the recent Chinese visit of President Vladimir Putin. In principle, Russia can use the Kazakh pipeline to deliver its oil to China, because a network of pipes links Kazakhstan and Russia.
Europe from the English Channel to the Urals in Russia is crisscrossed with a network of pipelines, which reflects modern realities of economic cooperation on the continent. There are no such international networks on the southeastern borders of Russia, because cooperation between the regional countries had not been as active as in Europe. But the regional integration of oil pipelines is now merging into a network. A relevant example is the plans of Kazakhstan and China to lay a gas pipeline parallel to the oil pipe, made public recently by Kazakhstan's President Nursultan Nazarbayev and China's Vice President Zeng Qinghong.
Kazakhstan's key oil partner is the Untied States, primarily its oil giant Chevron, while Russia is its largest gas production and transportation partner. Moscow and Astana are planning the modernization of pipeline networks and intend to join forces to modernize the gas pipelines from Central Asia to Russia, from Bokhara to the Urals, and several others.
The KazRosGaz joint venture, which was set up in 2002, is very active also on other markets, which has a direct relation to China. In particular, it will act as the operator of gas transportation across Kazakhstan and Russia to other countries.
Another gas-rich regional country is Uzbekistan, which is a transit territory for gas deliveries from Turkmenistan, in particular to China. Instability or economic underdevelopment of any of the neighboring states, for example Kyrgyzstan or Tajikistan, would affect the security of pipelines. In a way, the whole of Central Asia is a transit region for economic plans there. The Shanghai Cooperation Organization - a joint project of Russia, China and Central Asian states - is one more reflection of this new reality.
The recent events connected with the routes of Russian or Kazakh oil and gas supplies to China can be described as the diversification of these states' energy policy. It is a vital element of a global process called the growth of Asian influence on the world's economy.
