After years of negotiations, Russia finally signed a gas contract with China. Since then, disputes over the signing of this agreement have not subsided. Opinions are divided. Some consider this deal to be extremely profitable, others - unprofitable. This article will discuss the positive and negative consequences of the contract for the supply of Russian "blue fuel" to China.
Terms of a transaction
What does the gas contract with China mean? The terms of the transaction are as follows: the contract is concluded for 30 years, in the amount of $ 400 billion. A pipeline will be laid between the two countries, through which China will receive Russian natural gas, which is necessary for the development of its economy. In addition, a sufficient amount of “blue fuel” will make it possible to clean the air in the country. 38 billion cubic meters of gas will be supplied to China annually. Over time, shipments can be doubled. As for Russia, in addition to its obvious financial benefits, it will be able to diversify the market for its hydrocarbons and reduce its dependence on Western Europe.
The Power of Siberia gas pipeline
Fuel will be exported via the Power of Siberia gas trunkline. It will be included in the transport system of the Irkutsk and Yakutia gas production centers, focused on the supply of "blue fuel" to China, Japan, Korea and the Far East.
The first phase of the Yakutia-Khabarovsk-Vladivostok gas pipeline is planned for commissioning in 2017. The total length of the structure will be approximately 4 thousand kilometers. First of all, it will be 3 thousand kilometers, and the remaining part of the gas pipeline - 800 kilometers. The diameter of the pipeline is 1, 420 mm, its productivity is 61 billion cubic meters per year. The route of the route along which the Power of Siberia will be laid will be the location of the Eastern Siberia-Pacific Ocean oil pipeline, which will make it possible to save the cost of infrastructure and energy saving.
Motives for the transaction
There is an opinion that the gas contract with China is a breakthrough moment associated with the difficult geopolitical situation in Europe. However, the conclusion of such agreements does not occur in one day or even several months. For fifteen years, Russia and China have built their relations. The gas contract is the result of 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 the political and in the economic sense. It is no coincidence that many call the gas contract with China a historic event.
Market diversification
“Do not put all your eggs in one basket, ” says folk wisdom. Indeed, the constant conflicts of Russia with Western Europe can lead to unpredictable consequences. The economic sanctions by which the EEC countries are trying to “reason” our country after the accession of Crimea to Russia may affect the supply of gas and oil. And if it would be difficult for Europe to refuse Russian “black gold”, since there are many oil refineries on its territory, then “blue fuel” is in this risk zone. It is extremely unprofitable for the EEC countries to abandon Russian natural resources. Their strategic partner - the USA - will not be able to enter the European market with large volumes of natural gas in the near future. However, the threat still exists, so Russia signed the gas contract on time. China, 2014 for which was decisive in strengthening economic relations with our country, is unlikely to threaten it with any sanctions.
Experts note that if Europe refuses to supply Russian natural gas, Gazprom will have a worthy alternative. Let's say the volume of “blue fuel” in the European market will decrease from the current 29% to 16%. In order not to lose sales, the concern will only need to increase the volume of fuel sold in China to 70 billion cubic meters.
China's investments in the Russian economy
In 2013, China's direct investment in the Russian economy amounted to $ 4.08 billion. This is a very low indicator, given that tens of billions are invested in the economy of other countries by the PRC. However, due to the intensification of Russian-Chinese relations, by 2020, the volume of China's investments should grow seven times. One of the most promising areas in China is called investment in the economic development of the Far East.
Organization of the export of Russian “blue” fuel to China is a large-scale investment project of world significance. In the Russian Federation alone, approximately $ 55 billion will be invested in the construction of gas transportation and production facilities. A huge gas infrastructure will appear in the east of our country, which will boost the economy of the entire region. Entire sectors of the Russian economy will receive a powerful incentive for their development: engineering, pipe industry, metallurgy. It should be noted that the Power of Siberia gas pipeline, through which gas deliveries to China will be carried out, is constructed from pipes mainly of Russian production.
Fuel price
How much will Russian natural gas cost our partners from China? This issue is being discussed worldwide. The answer to it is hidden under the veil of trade secrets, and therefore is the main intrigue of the signed agreement. If you determine the price based on the total amount of the gas contract and the estimated volume of supplies, its value will be $ 350 per 1000 cubic meters. m. A more optimistic position is taken by Alexey Grivach, deputy director of the Energy Security Fund. In his opinion, taking into account the period of increasing supplies for five years to 38 billion cubic meters, the price of Russian fuel per 1000 cubic meters. m can reach 380 dollars.
It should be borne in mind that the tax rate on mineral extraction should be deducted from the price of gas exported to China, since tax incentives are provided for fields that will be the source for the supplied fuel. As a result, the state budget will lose a large amount. It turns out that in the bottom line, the price of “blue fuel” for China will be less than the average cost (381 dollars) of gas supplied by Gazprom to Europe. And significantly lower than the average price for which China purchases it from Myanmar or Turkmenistan. According to JP Morgan, China buys natural gas from Myanmar and Central Asia at $ 400 per 1, 000 cubic meters. m
Currency
Under what conditions is a gas contract concluded with China? In what currency will our eastern neighbor pay for fuel? These issues are of interest to supporters and opponents of the agreement. After signing the contract, experts began to prophesy a coup in the global financial system. The smooth withdrawal of Russian funds from American government bonds and the first cross-border operation carried out in Shanghai by VTB Bank in Chinese currency made it possible to draw very cautious conclusions. However, the agreement of the People’s Bank of China 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 concern Western financial movers. Everything goes to the point that the largest contract concluded between the PRC and the Russian Federation will not be paid in dollars. That is why the final price of Russian fuel has not yet been disclosed. For the United States, this turn of events will be a serious blow.
Relations between Russia and China
In a global sense, China and Russia are becoming strategic partners, as opposed to the countries of Europe and the United States. There is a certain trend according to which the world of Western values is positioned as universal. In this system, the entire world community should not only use the same products, but also think about the same. However, the identities of such powers as Russia and China are too strong. When these countries tried to remove from the political chessboard, the opposite reaction followed. States began to uphold the right to their independence and identity. China and Russia are recreating their cultural space, and this is a historical trend that operates throughout the world. And in this sense, the price that the contract of Russia with China assumes is not important. The gas resource is another common point of contact between the two states, which build relations on the basis of peaceful cooperation and mutual trust.
