Sino-Russian Gas and Oil Cooperation: The Reality and Its Impacts towards Regional and Global Trading
Speaker: Professor Keun Wook Paik, Senior Research Fellow, Oxford Institute for Energy Studies, Associate fellow at Chatham House
On May 21, 2014, the long waited Sino-Russian gas deal was signed, and the 38 bcm/y gas supply from east Siberia to northern China for 30 years (US$ 400 bn worth) was the biggest energy deal ever. In 2013, China had signed two major crude supply deals with Russia, with US$ 355 bn worth. If Altai gas deal with 30 bcm/y volume is added in the coming 12 month, the combined figure of Sino-Russian oil and gas deal will reach US$ 1 trillion. The importance of Sino-Russian gas deal lies in a fact that it will set the benchmark price for northern China's Bohai Bay gas market and will deliver a huge pressure to LNG developers targeting the Chinese LNG market. The US and EU sanctions against Russia with regard to the Ukraine crisis had consolidated Sino-Russian energy relations and consequently China became the biggest beneficiary. Russia is being demonised by its annexation of Crimea Peninsula, but Russia's large scale gas supply to China will help reducing the excessive Asian LNG premium and consequently the expansion of gas use in China. If China's heavy dependence on coal can be changed by the rapid expansion of gas use in China, let's say, China's coal dependence in China's energy mix can be reduced well below 50% by 2030, that will be the biggest contribution to take care of global climate change initiative. Prof. K-W Paik is a top authority on Sino-Russian oil and gas cooperation, and his talk will address the implications of the deal comprehensively.