Page 8 - AsianOil Week 50 2022

AsianOil EAST ASIA AsianOil

Iran, China sign 16 MoUs in wake of tensions

over Xi’s visit to Saudi Arabia

POLICY IRAN and China have finalised 16 invest- First Vice President Mohammad Mohkber and
ment-focused memorandums of understand- Chinese Vice Premier Hu Chunhua, who led a
The deals follow a ing (MoUs) as part of the 25-year strategic 70-member delegation. Stars and Stripes noted
spat between Beijing agreement between the two countries seen as in a report on the visit that Hu was recently
and Tehran over the roadmap to potentially hunreds of billions of removed from the top echelons of power in
status of islands in the dollars worth of Chinese projects in the Islamic China. The publication viewed the selection of
Hormuz Strait. Reublic. Iranian Finance and Economy Minister Hu for the visit as “a sign Beijing is keeping its
Ehsan Khandouzi announced the development, distance” from Iran as the regime continues to
IRNA reported on December 14. deal with widespread anti-government unrest.
The announcement comes days after a Khandouzi said the MoUs were signed as a
restrained spat broke out between Tehran and prelude to agreements to be reached at a meeting
Beijing over elements of a visit paid by Chinese of Iran and China’s presidents.
President Xi Jinping to Iran’s arch-rival Saudi The precise details of the MoUs were not
Arabia, where he had meetings with the lead- released but the strategic agreement ranges over
ers of Gulf Cooperation Council (GCC) Arab areas including energy, oil and gas, joint invest-
nations. Xi’s position on three islands claimed ment, foreign exchange, banking cooperation,
by both Iran and UAE displeased Tehran. transit, infrastructure and ports.
The MoUs were signed at the Iran-China "The vice premier of China agreed with the
Comprehensive Cooperation Program Sum- proposals of four economic committees," Khan-
mit held in Tehran in the presence of Iranian douzi added. ™

Gas crunch emerging in East as Kazakhstan

fails to meet China’s import requests

PIPELINES & THE global energy crisis that is so apparent National Petroleum Corp (CNPC) for $4.18bn
TRANSPORT in the West is now becoming that much more in 2005. Kazakhstan’s energy sector has, how-
visible in the East. Kazakhstan, one of the lead- ever, avoided falling under Chinese domination
Kazakhstan wants to ing crude oil and gas suppliers in Asia, has by commencing oil and gas exports to Europe,
conserve supplies for its announced that it intends to gradually decrease mainly via Russian territory that provides a path
own needs. its natural gas flows to China, citing domestic to the export terminal at Novorossiysk on the
consumption rising at what could become a cri- Black Sea. Hence, Beijing's attempts to monop-
sis-inducing rate. olise Kazakh energy exports have yielded poor
In June, Kazakh President Kassym-Jomart results.
Tokayev ordered the government to cut gas China's share in Kazakh oil production has
exports and ensure that an additional 2bn cubic halved from 31% to 16%, while Chinese invest-
metres (bcm) of gas were available to consum- ment in Kazakh oil and gas has also slowed. It
ers inside Kazakhstan. Tokayev, said meeting declined from $3.7bn in 2013 to $1.3bn in 2021.
domestic demand for gas must be held as an Moreover, of the 61.2mn tonnes of oil drilled in
absolute priority over exports, with the gas to Kazakhstan in 2020, only 10.5mn tonnes came
be sourced from the Tengiz field developed by from China-owned companies in Kazakhstan.
a consortium led by US energy giant Chevron. A decline in Kazakhstan's natural gas exports
As one of the world’s biggest importers of crit- to China is not unheard of. In 2020, the first year
ical energy needs, China has always been keen to in which the COVID-19 pandemic caused lock-
preserve its leading role in Kazakhstan's energy downs across the globe, China's gas demand fell
sector in order to secure the lion's share of its by 17%. Beijing asked Central Asian partners
shipments. China’s growing engagement in the to decrease China-bound gas flows. Although
country’s energy sector resulted, for instance, in demand sharply increased shortly after COVID-
the acquisition of PetroKazakhstan Inc, a Cana- 19 restrictions were lifted, new geopolitical and
dian-owned company, by state-owned China economic realities then intervened to put a

P8 www. NEWSBASE .com Week 50 16•December•2022