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Did Economics Defeat Politics? Russia’s Three Global Gas Projects

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Did Economics Defeat Politics? Russia's Three Global Gas Projects

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Russia has three successful global gas projects, despite the sanctions and pressure by the Western establishment.

The Power of Sibera pipeline, a $55 billion project launched on December 2nd, between China and Russia. It is part of a $400 billion deal to supply China with 38 billion cubic meters of natural gas (bcm) per year for 30 years.

Notably, the 1,800-mile pipeline is a way to ensure that even if the EU market shrinks in the future, there will be a market to sell Russian natural gas. Russia is home to the largest reserves of natural gas on the planet — 20% of the global total — while China is the world’s largest energy importer.

“The contract signed by our countries in 2014 was the largest agreement in the history of the domestic gas industry. Over 30 years, over a trillion cubic meters of gas will be delivered to China through the Power of Siberia gas pipeline,” Russian President Vladimir Putin said.

This project was first discussed in 2012. At that time, Russia supplied gas only to Europe, with which everything was already difficult: conflicts, either in transit or in price and so on. The events in Ukraine from 2013 onwards made it even more difficult.

Russia was looking for new markets, so the gas pipeline was built quickly. Power of Siberia Siberia has strengthened the economy of both Moscow and Beijing.

“The eastern branch of the Russian-Chinese gas pipeline is a landmark project of bilateral energy cooperation. It serves as an example of deep integration and mutually beneficial cooperation between our countries,” said Chinese President Xi Jinping.

Since the gas pipeline will go through both Russia and China, the infrastructure of both countries to accommodate for it will also improve.

“For our country, for Russia, this project is also important because gas will go through the pipeline not only for export, but also to the Amur Gas Processing Plant, which will become one of the most powerful in the world,” Putin said.

Alongside the Power of Siberia, Moscow will soon launch its other two projects – the Nord Steam 2 undersea Baltic gas pipeline to Germany and the TurkStream pipeline to Turkey and Southern Europe.

The TurkStream is expected to launch next month. A huge gas pipeline along the bottom of the Black Sea to southern Europe.

Five years ago, under pressure from Washington, Bulgaria said that there’s no pipeline, there will never be a Russian gas pipeline in Bulgaria. That all changed.

Russian President Vladimir Putin at a meeting with Serbian President Aleksandar Vučić made it clear: the construction was being delayed, Bulgarian Prime Minister Boyko Borisov immediately provided an excuse.

“My answer is to President Putin: he can come and see how fast we are building – on average, five kilometers a day. We carry out all the procedures, therefore, we are confident that we will build it. And next year, when we have massive capacities and the gas pipelines completed, believe me, this will be the best and quickest alternative for Russian gas,” said Bulgarian Prime Minister Boyko Borisov.

In approximately 6 months, the Nord Stream-2 is to launch. Through it, Russian gas will go to Finland, Sweden, Germany, Denmark.

Washington heavily opposed it and said that it would never be completed. Despite all the vows, the sanctions, the project is nearing its end. Russia couldn’t use foreign equipment due to sanctions, so it produced its own. The US tried to pressure Germany, but Berlin saw the financial benefit from it and wouldn’t succumb to the demands.

Finally, in November 2019, the go-ahead for the construction of the final section of the gas pipeline was given by Copenhagen.

American Congressmen appear desperate at this point- they are now proposing sanctions against companies that worked on the construction of the Russian gas pipeline.

“It is narrow, targeted sanctions, like a scalpel, designed specifically to prevent the only ships that can lay the pipeline from laying the pipeline and completing that pipeline,” Senator Ted Cruz said.

“Let me give you a very clear message to take back to your colleagues. […] Time is of the essence. A strategy that is, ‘Let’s pursue our diplomatic options,’ at this point, is a strategy to do nothing. […] A strategy that will result with 100 percent certainty in the pipeline being completed and Putin getting billions of dollars and Europe being made energy dependent more so on Russia and in weakening the United States’ position in the world,” Cruz said.

Moscow is launching three global gas projects at once. But in fact, it is changing the global energy distribution system for many decades to come.

This is also an example of how “effective” pressure from the US truly is and will potentially pave the way for more open economic cooperation between regions and sates, free of politization.

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