An agreement to conduct a feasibility study . . .
During Mongolian Prime Minister Ukhnaagiin Khürelsükh’s visit to Russia on December 5, Russian energy company Gazprom signed a memorandum of understanding (MoU) with the Mongolian government to assess the feasibility of a natural gas pipeline from Russia to China by way of Mongolia. Immediately, the Mongolian and Russian governments established a working group to conduct the feasibility study and agree on transit fees. This would be the second pipeline under the C$500 billion gas deal between the Chinese and Russian governments to provide natural gas from Siberia to China.
Pipeline routes face numerous challenges . . .
The second gas pipeline from Russia to China was initially planned to be built over the narrow Russia-China land border between Mongolia and Kazakhstan, leading to Xinjiang. That plan, however, faced strong opposition by Russia’s Altai Republic and the indigenous community of the Ukok Plateau, which is recognized as a UNESCO Heritage Site. Further dampening the prospects of this route were the costs of constructing a 2,600 km pipeline through this treacherous, mountainous region into Xinjiang, which has low local demand for natural gas. Additionally, both China and Russia were concerned about the volatility of the security situation in Xinjiang.
Pipe dreams and potential boost for the BRI . . .
The building of the natural gas pipeline through Mongolia would boost tri-lateral economic relations in several ways. First, it would be a key project for the stalled China-Mongolia-Russia Economic Corridor, which was touted as one of the six economic corridors of the Belt and Road Initiative (BRI) during Chinese President Xi Jinping’s visit to Mongolia in 2014. Second, the pipeline has been cited as a means to boost Mongolia’s overall trade with Russia, especially as Mongolia’s economy has been heavily dependent on China since the 1990s, when economic ties with Russia faded. Additional environmental considerations raised by the Mongolian government include an expected reduction of urban air pollution from using natural gas.
READ MORE
- Oil & Gas Journal: Gazprom signs MOU with Mongolia’s Deputy Prime Minister
- Petroleum Economist: Putin backs trans-Mongolia pipeline
- Radio Free Asia: China, Russia Pursue Mongolia gas project
