Energy drives new Great Games

The optics of the meetings between the leaders of India, Russia and China at the Shanghai Cooperation Organisation (SCO) summit last month led to many instant analyses about geopolitical realignments.

- RANJAN MATHAI

They overshadowed the Russian announcement of an energy agreement of global importance — on the “Power of Siberia 2” pipeline, for supply of 50 billion cubic metres (bcm) of gas per annum to China for 30 years.

The planned pipeline, from the Yamal Peninsula in Western Siberia to China via Mongolia, will be one of the largest and most capital-intensive energy projects in the world, according to Alexei Miller, the chief executive officer of the Russian gas company Gazprom.

The Chinese side is yet to confirm the Russian statements, but not because of any concerns about western sanctions. The price of gas and other technical aspects of the deal (discussed for over a decade) are still to be finalised. But when concluded, the agreement will mark a geo-politically significant tieup between China and Russia in a Eurasian continental energy nexus, which could also impact the global seaborne trade in liquefied natural gas (LNG).

The Power of Siberia 1, built in 2018 and now being expanded, along with pipelines from Sakhalin, can raise Russian pipeline deliveries to China from 38 bcm to around 48 bcm.