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China expands Central Asia pipeline

In the last 1990s, when China first began signalling its interest to construct a gas pipeline from Turkmenistan to Xinjiang, sceptics mocked at it as the dragon’s pipedream. Well, the pipeline with the impressive capacity of 30 bcm annually has been operational since 2009 and already delivered 13.8 bcm gas to China, as per Beijing’s figures. Now comes a bombshell. China National Petroleum Corporation says it plans to have a 500% increase in gas imports from Central Asia by 2015. To this end, China is expanding the capacity of the pipeline and the construction of two new branch lines will be completed by 2013 so that the pipeline system can deliver a staggering 55-60 bcm annually by 2015.

The Chinese move also means Beijing is not overly anxious to do a gas deal with Russia. During President Hu Jintao’s visit to Moscow in July, Beijing desperately tried to swing a gas deal with Russia after years of negotiations but failed in its diplomacy due to differences over the price of gas. The next round of talks is due in September and the timing of the announcement of the expansion of the Central Asian pipeline suggests that Russia’s plans to export gas to China may no longer be such a priority for China as was imagined. In short, China is signalling that it has other options and is not in such a tearing hurry. The Russian plan was to supply China with 68 bcm of gas per year through two pipelines.

The big question is whether China can do without Russian gas. China hopes to increase the share of gas in its energy mix from about 3% currently to 10% by 2020, but its main fuel remains coal and China has plenty of coal. But this is also a geopolitical question since energy cooperation forms a strategic template of Russia-China ties. Besides, Europe which is a major consumer of Russian gas will also be watching whether or not Moscow would have a ‘China card’. Most certainly, Moscow would be uneasy about the lengthening shadows of China on Central Asia’s energy map. President Dmitry Medvedev is planning two summit meetings with his Turkmen counterpart in the coming 4-month period.

Above all, the Chinese announcement signifies that Beijing is becoming a big stakeholder in the stability and security of Central Asia. The Chinese move comes amidst reports that the US hopes to establish permanent military presence in Afghanistan ans NATO would have plans to expand its influence in Central Asia. China is trumping the US in the scramble for energy in the Caspian and Central Asia.

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