MOSCOW, March 21 (RIA Novosti) - Russian natural gas supplies to China will help Russia end its dependence on European markets, several prominent political scientists said Tuesday after the two countries' energy giants signed a memorandum.
Alexei Miller, the chief executive of Russian energy giant Gazprom, and China National Petroleum Corporation head Chen Gang put pen to paper in Beijing, where President Vladimir Putin had earlier arrived on a two-day visit.
Gas exports to China will come from West Siberia during the first stage of the project to build a gas pipeline system to meet the energy-consuming giant's needs and later from East Siberia, with exports to amount to 30-40 billion cu m of gas a year at each stage. A source in the Russian delegation traveling with Putin said a $10-billion gas pipeline to China could be commissioned in 2011.
Konstantin Simonov, director of the Center for Current Politics in Russia, a think tank, said the West Siberian option was preferable given that China was building liquefied gas terminals on its Pacific coast.
"Separating liquefied gas [delivered by sea] and pipeline gas deliveries would make sense, and it would be logical to build a gas pipeline to China's western provinces, where LNG is more difficult to supply," Simonov said.
Simonov also said that Russia should focus on east-bound supplies, since Europe was increasingly discussing alternative sources of natural gas deliveries along alternative energy sources, including nuclear power.
"They are blackmailing us by talking about alternative projects, even though Europe clearly does not have other options given a decline in gas output [in Europe]," he said.
He said Russia was committed to ensure gas supplies to European consumers, but should respond to European pressure and plans to deter Russia's growing presence on local gas markets by showing that it had other options as well.
The expert called for Russia to enter the Asian market. "The sooner Russia enters this market, the easier it will find to strengthen its positions there," he said.
Valery Nesterov, an analyst with the Troika-Dialog investment company, said under national energy strategy adopted in 2003, Russia was seeking to diversify its oil and gas exports. "The point is that Russia is too dependent on the European market, both in terms of oil and natural gas exports," he said.
According to the analyst, diversification will bring the country new markets, on the one hand, and better positions in talks with foreign partners, on the other.
"This is particularly important in light of the campaign conducted in some European countries to diversify energy imports," Nesterov added.
He highlighted the past winter's problems with Ukraine during a bitter dispute over natural gas prices. Russia's neighbor siphoned off gas bound for Europe, which made some countries contemplate reducing their dependence on Russian supplies.
However, Gazprom, Russia's monopoly in the sector, had let it be known that consumers depended on Russia's willingness to sell its gas as much as Russia depended on Europe's demand for its supplies, he said. Russia can hint, he continued, that it will offer gas to the energy-hungry Chinese market in the event of a decline in European purchases of Russian gas, which is hardly possible.
"That, I think, is the point of this decision. Exporting 20-30 billion cubic meters of gas to China is quite realistic. But the figure could be higher, and Gazprom should have stronger competitive positions," the analyst said.
At the same time, Nesterov denied that the signing of the memorandum might lead to a deterioration in Russia's relations with Europe. "If any problems happen, responsibility rests with transit states and not Gazprom. Gazprom, on the contrary, is seeking to keep the 25-26% share of the European market [in its supplies] unchanged," he added.
Nesterov mentioned that Gazprom also intended to increase its presence on some markets of northern Europe and the Iberian Peninsula. "However, if consumers fear such dependence or if they have more attractive proposals, which I doubt, Gazprom will easily enough re-orient itself to other, for instance Asian Pacific, markets," the analyst said.
Dmitry Mangilev, an analyst with Moscow-based Prospect Investment, said that although the project of Russian gas supplies to China required huge investment, it would secure dividends in the long term. "China will only increase consumption," he added.
The expert said the agreements reached with China suited Russia's needs for alternative outlets. "China and the Asian market as a whole are the most rapidly developing consumers," Mangilev said, adding that Russia would probably expand on this market.
