After years of negotiations, Russia finally concluded a gas deal with China.Since then, the controversy over the signing of the contract does not cease.Opinions were divided.Some believe this transaction is extremely beneficial, others - a loss.In this article we will talk about the positive and negative implications of the contract for the supply of Russian "blue fuel" in China.
Terms of the deal
What does the gas contract with China?Terms of the transaction are as follows: the contract is for 30 years, amounting to $ 400 billion.The two countries will build a pipeline through which China will receive Russian natural gas required for the development of its economy.Furthermore, a sufficient quantity of "natural gas" will clean the air in the country.Every year in China will be supplied 38 billion cubic meters of gas.Over time, the volume of deliveries will be doubled.As for Russia, it is in addition to the obvious financial benefits, will be able to diversify the market for its hydrocarbons and reduce dependence on Western Europe.
pipeline "Power of Siberia»
fuel exports will be carried out on the main gas pipeline "Power of Siberia."He will be part of the transport system Irkutsk and Yakutia gas production center focused on the supply of "blue fuel" in China, Japan, Korea and the Far East.
first phase of the pipeline "Yakutia-Khabarovsk-Vladivostok" is scheduled for commissioning in 2017.The total length of the construction will be about 4000 kilometers.In the first place it will have 3000 kilometers for the remainder of the pipeline - 800 kilometers.Pipe diameter pipeline - 1,420 mm, its capacity - 61 billion cubic meters a year.Route tracks, which will be laid on the "Power of Siberia", will be the location of the oil pipeline "Eastern Siberia-Pacific Ocean", which will give an opportunity to save costs on infrastructure improvement and energy conservation.
Motives transaction
It is believed that the gas contract with China - is a breakthrough moment associated with a complex geopolitical situation in Europe.However, conclusion of such agreements does not happen in one day or even a few months.For fifteen years to build relations, Russia and China.The gas contract - a consequence of a long painstaking work to create a large-scale strategic partnership between the two powers in order to consolidate its position in the world.At present, cooperation between China and Russia has received a new round, both in political and in economic terms.It is no accident the gas contract with China by many as an historic event.
market diversification
«Do not put all your eggs in one basket" - says the proverb.Indeed, the constant conflicts between Russia and Western Europe may lead to unpredictable consequences.Economic sanctions, which the EEC countries are trying to "reason with" our country after the accession of Russia to the Crimea, can relate to the supply of gas and oil.And if from the Russian "black gold" Europe will be hard to refuse, because on its territory there are many refineries, the "blue fuel" in this sense, it is at risk.EEC countries is extremely disadvantageous to abandon the Russian natural resources.Their strategic partner - the United States - will soon be able to enter the European market with large volumes of natural gas.However, the threat is still there, so the time Russia signed a gas contract.China, which in 2014 was decisive for the strengthening of economic relations with our country, it is unlikely it will threaten any sanctions.
Experts note that in case of failure of Europe on Russian natural gas company "Gazprom" is a worthy alternative.For example, the amount of "blue fuel" in the European market will decline from the current 29% to 16%.Concern not to lose sales, it will be sufficient to increase the amount of fuel sold in China up to 70 billion cubic meters.
Investments of China in the Russian economy
In 2013, China's direct investment in the Russian economy amounted to 4.08 billion dollars.This is a very low figure, given that the economy of other countries China is investing tens of billions.However, due to the intensification of Russian-Chinese relations, in 2020 the volume of investment in China is expected to grow seven times.One of the most promising areas in China called investments in the economic development of the Far East.
Organisation of export of Russian "blue fuel" in China - a large-scale investment project of global significance.Only on the territory of the Russian Federation in the construction of transport and natural gas production will be invested about 55 billion dollars.To the east of our country will be a huge gas infrastructure, which will raise the economy of the entire region.Whole sectors of the Russian economy will have a powerful incentive for its development: engineering, pipe industry, metallurgy.It should be noted that the pipeline "Power of Siberia", which will be carried out gas deliveries to China, the construction of the pipes mostly of Russian origin.
price of fuel sold
How much will my Russian natural gas to our partners from China?This issue is discussed all over the world.The answer is hidden under the veil of commercial secrecy and is therefore the main intrigue of the agreement.If you determine the price based on the total amount of the gas contract and the estimated volume of supply, its value will be 350 dollars per 1,000 cubic meters.m. more optimistic position is Alex Grivach, deputy director of the Fund's energy security.According to him, taking into account the period of increasing supply within five years to 38 billion cubic meters of Russian gas price for 1000 cubic meters.m can reach $ 380.
Please note that the price of the exported gas to China have to deduct tax on the extraction of minerals, as for the fields that will be the source for the supplied fuel, provide tax benefits.As a result, the state budget will lose a large sum.It turns out that the bottom line price of "blue fuel" for China will be less than average cost ($ 381) of gas supplied "Gazprom" to Europe.And significantly lower than the average price at which it purchases from China of Myanmar and Turkmenistan.According to JP Morgan, China buys natural gas from Myanmar and in Central Asia to $ 400 per 1,000 cubic meters.m.
Currency
Under what conditions gas contract signed with China?In what currency will pay for the fuel, our eastern neighbor?These questions interest the supporters and opponents of the agreement.After signing the contract, experts began to predict a revolution in the global financial system.The smooth conclusion of the American Russian government bond funds and cross-border nature of the first operation, carried out in Shanghai VTB in the Chinese currency, allowed to make very cautious conclusions.However, the People's Bank of China agreement, and the Bank of Russia on the use of national currencies in mutual settlements and the creation of a joint Russian-Chinese rating agency should seriously disturb the western tycoons.Everything goes to the fact that the largest contract signed between China and Russia, will be paid not in dollars.That is why the final price of Russian fuel is not yet disclosed.For the US, this turn of events would be a serious blow.
Relations between Russia and China
Globally, China and Russia are strategic partners in contrast to Europe and the United States.There is a certain tendency, according to which the world is positioned Western values as universal.In this system, the entire international community must not only use the same products, but also to think about the same.However, the identity of such powers as Russia and China, too strong.When these countries have tried to remove from the political chessboard, followed by a backlash.States have begun to defend their right to independence and identity.China and Russia recreate their cultural space, and this is a historical trend that affects the entire world.In this sense, the price is not important, which involves a contract between Russia and China.Gas resources - is another common point of contact between the two countries are building relations based on peaceful cooperation and mutual trust.
Conclusion We reviewed the major political and economic opportunities offered by our country's gas deal with China.Pros and cons of the agreement must be assessed in the coming macroeconomic perspective.Of course, the "Gazprom" does not receive immediate benefit from this large-scale transactions.But the concern will be able to provide alternative product market;master the investment made by our Eastern partners in the project (advance payment for the construction of the pipeline is 25 billion dollars);create a huge infrastructure for the extraction and transportation of natural gas and thereby revive the economic situation in the Far East.The question of the price for Russian gas supplies is still open and is a cause for concern in some financial analysts.However, in the long term "pros" in the gas contract with China much more than the "cons".Is it - time will tell.
