predictable outcomes of China’s change of course in 1978
that set the world’s most populous country on the track of
economic growth.
Facing the growing cost of heavy imports of fossil energy
and worsening air pollutions because of heavy consumption
of such energy, China has made impressive efforts to decrease
its consumption of oil, gas and coal and thus to reduce
their share of its energy mix by encouraging, especially,
renewables and nuclear energy. Despite its emergence as
the world’s largest producer of wind turbines and solar
panels, the country is still heavily dependent on fossil fuels
accounting for about 90.38% (2578.2 million toe) of its
energy mix (2852.4 million toe) in 2013. Yet, the bulk of these
requirements has to be imported as there is still a large gap
between its production and consumption of oil, gas and coal
as evident in its respective 2013 statistics: oil (4.18 million bpd;
10.756 million bpd), gas (117.1 billion m
3
; 161.6 billion m
3
) and coal
(1840.0 million toe; 1925.3 million toe). Consequently, securing
reliable means for imports is crucial while their availability,
although important, is not a major concern thanks to their
global abundance at lowering prices.
Pipelines
Against this background, pipelines are important components
of Chinese energy security. Their importance has further
increased owing to Beijing’s immediate and long-term concerns
about the sea routes through which China imports the bulk of
its energy imports. These are the existence of chokepoints on
those routes (Gulf of Eden and Strait of Malacca) because of
piracy or its threat and the possibility of expansion of armed
conflicts in or around their costal countries to their respective
waters (Red Sea and South China Sea), on the one hand. On
the other, Beijing is aiming at decreasing its dependence, to
the extent possible, on the sea routes over which it has and
will not have control in the foreseeable future because of its
naval power weaknesses. As a result, shifting its imports from
sea to land and thus importing more petroleum from suppliers
in its close proximity with land connection to China have
motivated the construction of many pipelines in that country.
Thus, import pipelines account for the bulk of the major
Chinese pipeline projects, while the major domestic ones
are meant to distribute the imported fuels in China. Given
that China is switching to gas as much as possible to curb air
pollution, most of the major Chinese pipelines are gas ones.
Within the mentioned context, the following account offers a
summary of the major ongoing Chinese pipeline projects.
The Russian-Chinese gas pipeline
The Russian-Chinese gas pipeline is the most important
ongoing pipeline project in the Asia-Pacific region. Its
importance does not lie in the volume of gas that will pass
through it once it is operational in 2018 (38 billion m
3
/yr) as
that of the Central Asian Gas Pipeline System is more than
double this amount, even though it is certainly large enough
(1 trillion m
3
over 30 years) to rank it as one of the largest
Chinese and also regional pipelines. What makes it important
is that it reduces China’s dependency on expensive LNG
imports by sea when the country lacks naval supremacy over
the sea routes used for such imports. Cheaper Russian piped
gas surely makes the pipeline also important financially.
Additionally, uplifting Russia’s gas role in Asia makes the
pipeline important. In this region, the Russians are currently
confined to LNG exports while Russia’s main gas market,
Europe, is diminishing in importance due to its declining
and ageing population and shrinking economy. The latter’s
increasing hostility towards Moscow over Ukraine to be
possibly translated into its decreasing petroleum imports from
Russia in the medium-term, if it finds alternative suppliers, is
also detracting from its long-term significance for Russia.
The Power of Siberia pipeline
Being a Russian-envisioned project to help Russia expand
its exports to East Asia, the Power of Siberia GTS (POS),
“Sila Sibiri” in Russian, is the Russian pipeline for exporting
gas to China. The pipeline (approximately 4000 km; 52 in.;
61 billion m
3
/yr) is a joint venture of CNPC and Gazprom.
Consisting of two segments, the pipeline, also known as
the East Route Gas Pipeline, is designed to facilitate gas
transportation from the Irkutsk and Yakutia gas production
centres to Russia’s Far East and also China. To this, China
will add a pipeline to import Russian gas across the Russian-
Chinese border, the specifics of which are currently unknown.
The pipeline is part of a deal described by the Russians
as their largest one ever (US$400 billion) involving the
development of the Russian East Siberian gas fields, sale of
Russian gas to China for 30 years and pipeline construction.
Gazprom will start developing its Chayandinskoye (Chayandin)
field’s gas parallel to its construction of the pipeline’s first
segment (3200 km Yakutia-Khabarovsk-Vladivostok) to be
completed by late 2017 as planned. Its second segment
(800 km Irkutsk Region-Yakutia) will be constructed later. The
Chayandin and Kovyktin gas fields in eastern Siberia will be the
POS’s main feeders.
Gazprom has instructed all of its specialised structural
units and subsidiary companies to begin the implementation
of the deal’s investment projects, including gas production,
transmission, and processing capacity projects. Thus, the
welding of the first roll of pipes on the POS’s Russian part in
Yakutsk, the capital of Russia’s Sakha (Yakutia) Republic, on
1 September 2014 began the construction of the pipeline.
Chinese Vice Premier Zhang Gaoli and Russian President
Vladimir Putin attended the event. The POS’s Russian part
starts at the Kovyktin and the Chayandin gas fields to extend
through the existing pipelines in eastern Siberia and end in the
Far East Port of Vladivostok.
The construction of the POS’s Chinese section is set
to start in 2015. Reportedly, the Chinese government has
approved the CNPC plan for its construction. Consisting of
northern, southern and central sections, it will pass through
six Chinese provinces (Heilongjiang, Jilin, Liaoning, Hebei,
Shandong and Jiangsu), the Inner Mongolia Autonomous
Region, Tianjin and Shanghai.
There is uncertainty about the pipeline’s total cost while
there are differing reports about that of its Russian part.
Whereas some sources estimate the latter at US$20 billion,
others suggest China may make up to US$25 billion in advance
14
World Pipelines
/
JANUARY 2015
