Page 4 - FSUOGM Week 38 2022

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FSUOGM COMMENTARY FSUOGM

Could Mongolia host a China-

Russia oil pipeline?

Russia has a strategic interest in expanding energy ties with China, but there
are obstacles to such a pivot.

MONGOLIA RUSSIA proudly unveiled plans in 2019 to build underway on an oil pipeline through Mongolia.
a second natural gas pipeline to China, this time Mongolia’s Khurelsukh said at the summit
WHAT: traversing Mongolia. As the EU drives to sever that his government supported the construction
Mongolia has talked up all energy ties with Russia, Moscow now appears of not only gas but also oil pipelines through the
the prospect of a Russia- to be pushing for an oil pipeline that would also country’s territory. No plans for an oil pipeline
China oil pipeline. cut through Mongolia. via Mongolia have yet been formally proposed,
Russian President Vladimir Putin met with but the comment indicates that it is something
WHY: his Chinese and Mongolian counterparts, Xi the three parties are considering.
The Kremlin needs to Jinping and Ukhnaagiin Khurelsukh, at a sum-
carve out new markets mit of the Shanghai Cooperation Organisation Benefits
for its oil in Asia to offset (SCO) in the Uzbek city of Samarkand on Sep- Russia is scrambling to find new destinations
losses in Europe. tember 15. The three sides are already collabo- for its energy exports as EU imports continue
rating on the Power of Siberia 2 project, aimed to fall. The country already pumps 1.6mn bar-
WHAT NEXT: at pumping some 50bn cubic metres per year rels per day (bpd) to China and other Asian
China may be reluctant to of gas from Russian fields that currently serve markets via the Eastern Siberia-Pacific Ocean
rely too much on Russia European customers to China via Mongolia. A (ESPO) pipeline system. Its other option is
as a supplier, especially supply contract to underpin the pipeline is not sending crude through Kazakhstan, but along
considering its use of yet in place, but Russian Deputy Prime Minister both routes oil flow is now close to nearing
energy as a political Alexander Novak said last week he expected one maximum capacity, creating a bottleneck at a
weapon in Europe. to be signed shortly. time when Russia is eager to divert as much oil
Now, with the EU preparing to impose an to Asia and away from Europe as possible.
embargo on Russian oil imports within a few Running an oil pipeline through Mongo-
months, it appears that discussions are also lia would solve this problem. Its most logical

P4 www. NEWSBASE .com Week 38 23•September•2022