Russia looks east, but thinks Europe

MOSCOW . (RIA Novosti political commentator Alexander Yurov.)

The Russian presidentís visit to China took place at a good time. Russian-Chinese trade rose to $30 billion in 2005, up nearly 40% on 2004. Russia is maintaining a positive trade balance, with exports at $15.9 billion and imports at more than $13 billion. China has become Russia ís second largest foreign trade partner after Germany .

The talks between the Russian and Chinese leaders have shown that this new trend is only the beginning. One of the highlights of Vladimir Putinís visit was the signing of a protocol on gas deliveries to China . The document was signed by Gazprom CEO Alexei Miller and Chen Geng, president of China National Petroleum Corporation (CNPC).

The document stipulates that Siberian gas will be delivered not only to Europe, but also to China beginning in 2011. Initially, Russia will supply up to 80 billion cu m annually. In 2005, Gazprom produced 547.2 billion cu m of gas and exported 151 billion.

Despite the numbers, the agreement was not considered sensational. China and Russia have been talking about oil and gas cooperation for 10 years. Analysts predicted in the mid-1990s that China would become the biggest importer of Russian gas by 2010.

It is not clear where Russia would get so much gas and who would pay for the construction of pipelines from deposits in Siberia to Chinese consumers. Gazprom has calculated that the construction of a 3,000km pipeline across Altai would cost $5 billion. But the Russian gas giant also has other obligations. It plans to invest about $6 billion into the North European Gas Pipeline (NEGP), of a similar length, which is to link northern Russia with Germany . The NEGP is to be commissioned at about the same time, between 2010-2020.

It appears that Russian authorities are not paying much attention to these expenses. Putin said confidently that gas would be delivered to China via two routes, one across Altai to the western provinces and another to circumvent Lake Baikal to head to the eastern regions of China . The pipelines will have a comparable throughput capacity of up to 40 billion cu m a year, supplying China with enough hydrocarbons and spurring Russia ís economic progress. Experts said high prices would enable Gazprom to accumulate about $30 billion in five years. This means that by 2010, not only Europe but also Asia would depend on Russian gas.

The recent talks in Beijing marked another stage in the promotion of closer economic and cultural relations between the two countries. The Russian president was accompanied on his trip by a big delegation of Russian businessmen. They discussed many spheres of cooperation with their Chinese counterparts, notably the mutual production of polymetallic ores in the Transbaikal region. Vladimir Putin also unveiled the Year of Russia in China , which means that scientists and cultural figures will be next in line for a visit to China . -0-