Page 4 - FSUOGM Week 33 2021

FSUOGM COMMENTARY FSUOGM
China develops energy trade with Russia
A new cross-border railway bridge, which is nearly ready to start operations, is expected to bolster the two countries’ energy trade
FAR EAST
WHAT:
Construction of
the Tongjiang- Nizhneleninskoye railway bridge has been finished.
WHY:
The bridge signals China’s continuing preoccupation with energy security.
WHAT NEXT:
Beijing will continue shoring up its energy security by investing in its neighbour’s oil and gas projects.
CHINA is developing new oil and gas supply routes with Russia even as it plans to lower the country’s carbon footprint in the long run.
Not only has construction of the two coun- tries’ first cross-border railway bridge been wrapped up, paving the way for another energy transportation route to open up later this year, but China Railway Construction Corp. (CRCC) has also signed a contract to build the first phase of a Siberian petrochemical plant that will target the Chinese market.
China’s oil demand may have softened this year from the heady pace set in 2020 – a slow- ing that has reportedly seen premiums for spot cargoes of Russian East Siberia- Pacific Ocean (ESPO) crude slide in the past couple of months – but the country’s oil and gas demand growth is expected to remain robust over the next decade.
Railway connections
Construction on the Tongjiang-Nizhnelenin- skoye railway bridge finished on August 17, according to a report by the official Global Times newspaper.
Tongjiang is a small border city located in the Heilongjiang Province, which is home to the former supergiant Daqing oilfield. State-run Pet- roChina has been overseeing a managed decline of Daqing in recent years.
“There will be a Russian train coming over to the Chinese side in the second half of August as a test to see if everything is fine,” the Global Times quoted project manager Lin Yonghan as saying on August 17. Lin added that the bridge was expected to enter commercial operations before the end of the year.
The director of Xiamen University’s China Center for Energy Economics Research, Lin Boqiang, told the daily that the bridge should lead to a deepening of the two countries’ energy trade.
“Since China and Russia share a border, China will have greater security when importing oil and gas from Russia, compared with [other shipping options],” the official said.
China has long sought to develop energy ties with its immediate neighbours as it strives to reduce its exposure to maritime shipment risks. Between geopolitical tensions in the South China Sea and the Strait of Hormuz, Beijing’s energy planners have long pursued overland energy trade routes.
China was importing oil and liquid petro- leum gas (LPG) from Russia by train long before the ESPO pipeline started pumping oil to the Chinese market. ESPO delivers crude via a 70-km spur line from Skovorodino to Mohe City in Heilongjiang, where it is then pumped on to Daqing.
P4
w w w . N E W S B A S E . c o m Week 33 18•August•2021