At the Shanghai Co-operation Organisation summit in the silk-road entrepot of Samarkand in September,Russian President Vladimir Putin–who famously makes his eminent visitors wait–was left hanging around by the leaders of India,Turkey,Azerbaijan and Kyrgyzstan.
This disrespect was a premonition for a bad few months for Russian gas diplomacy in inner Asia.
On May 19,President Xi Jinping chaired the inaugural China-Central Asia summit in Xian,another great historic trading city.There,he encouraged the acceleration of the crucial Line D pipeline from Turkmenistan,which could bring another 30 billion cubic metres(bcm)of gas annually,almost doubling China’s imports from the Central Asian gas treasure trove.
In contrast,last week,Russian Prime Minister Mikhail Mishustin left Beijing with warm words but nothing concrete on Moscow’s key objective:more gas sales to China.
In the year 751,the battle of Talas River on the modern Kazakh-Kyrgyz border ensured that Central Asia would be a Muslim region ruled by the Abbasid,not the Tang dynasty.In 1405,the great Turkic conqueror Timur,his capital Samarkand,died in the oasis town of Farab while on his way to invade China.
From 1689 to 1864,the successive treaties of Nerchinsk,Kyakhta,Aigun,Tarbatagai and Beijing transferred huge swathes of Siberia,Manchuria and Central Asia from Chinese to Russian control.And in 1864,the Tsar’s forces captured Samarkand from the Emirate of Bokhara.
The Soviet Union and China fought a brief,undeclared border war in Manchuria and Xinjiang in 1969.The Soviet victory on the field was followed by diplomatic defeat,as the Communist bloc was split by US president Richard Nixon’s outreach to Mao Zedong,devised by Henry Kissinger,who turned 100 on Saturday.
Now,Russia’s blunders in Ukraine threaten to undermine its two centuries of dominance over Central Asia.It is all too apparent that China,its notional ally,has the upper hand.Russia has destroyed its best gas market,in Europe,and now has to seek new outlets,while China has the luxury to wait and choose from several options.
Brussels anticipates that the EU will cut gas consumption this year by more than the total amount it still imports from Russia.In 2021,150 bcm arrived,then 74 bcm in 2022,and just 11 bcm so far this year.
A hot summer followed by a cold winter and a resurgence of Chinese demand could still cause some uncomfortable moments for Europe.Yet as renewable and nuclear power,efficiency measures and the creation and import of hydrogen ramp up,any residual Russian requirement will evaporate in the next few years.
From 2026 and 2027 onwards,a wave of new liquefied natural gas exports from Qatar,the UAE,the US,East Africa and elsewhere should amply supply the global market.
Can Russia look to its eastern neighbour to replace Europe customers?In 2020,the Power of Siberia pipeline opened from fields in East Siberia to China.For more than a decade,Moscow has also been promoting the Power of Siberia 2(PoS-2)line,a planned 2,600km link from the West Siberian fields that have hitherto supplied Europe,running through Mongolia to Beijing.
But China has remained cagey.In February 2022,Mr Putin did succeed in getting approval for a smaller pipeline from the island of Sakhalin.Beijing,though,has apparently been wary of being drawn into competition with Europe for West Siberian gas.For other Russian gas,it seems to pay about half the price charged to Europe,while Gazprom bears the hefty cost of pipeline construction,which Russia’s Deputy Prime Minister Alexander Novak puts at$67 billion for PoS-2.
Russia has just one other option for its stranded gas–to expand LNG exports through the Arctic–though on a smaller scale,higher cost and requiring more technological sophistication than its pipelines.
In 2021,it exported 175 bcm of gas to its“far abroad”,that is,excluding the“near abroad”of former Soviet states such as Belarus.Russia supplied just 15 bcm in 2022 of China’s entire gas imports of around 160 bcm.The Chinese market can absorb only a small amount of the new surplus.
Beijing hardly needs Russia’s cut-off of flows to Europe to remind it not to depend too heavily on any one supplier or route.In November,state company Sinopec signed a large and exceptionally long 27-year contract to buy LNG from Qatar,and last month,it took a 5 per cent stake in one of the new Qatari LNG export facilities,China’s first such direct investment.
But tanker-borne LNG imports could also be threatened in the event of conflict with the US,for instance over Taiwan.And this makes Central Asian gas an attractive component of the portfolio.
Turkmenistan has the fourth-largest gas reserves in the world,more than the whole of Africa.But geography and politics block its other export routes,with Russia athwart the route to Europe,sanctioned and gas-rich Iran to the south,and Afghanistan on the road to Pakistan and India.There are only faint hopes for a trans-Caspian route via Azerbaijan and Turkey.
So it relies on three existing pipelines to China,the last of which opened in 2014,which take the same route through Uzbekistan and Kazakhstan.Line D,by contrast,would head through Uzbekistan then Tajikistan and Kyrgyzstan–mountainous,but further from Russia.
China National Petroleum Corporation provides finance and expertise for the development of the Galkynysh field,often estimated to be the world’s second-largest.It is the main source for Line D,which could be operational by 2028,ahead of PoS-2 in the early 2030s.
Of course,China is playing both Turkmenistan and Russia to extract better terms.Gas pipelines alone are not going to reverse the verdicts of 751,1864 and 1969.But leaders from Ashgabat,Bishkek and Dushanbe will certainly not keep Xi Jinping on hold.
Robin M.Mills is chief executive of Qamar Energy and author of The Myth of the Oil Crisis
（Picture: Veer）
