China, Russia Double Down on Pipeline Deals Despite Delays

By Lauren Dodillet

China’s foreign minister Wang Yi said Sunday that negotiations with Russia for the Altai pipeline should be completed by the end of 2016. The pipeline will carry gas from the Altai region of Siberia into China. China, while remaining neutral on the Ukraine issue, has continued to sponsor Russia through resource and currency deals such as this.

The Altai pipeline was brought up in talks last November that finalized the creation of the Power of Siberia pipeline. Work on the Power of Siberia has stalled through the winter season, since little construction can be completed while the ground is frozen. The two countries also disagree on how the pipelines will be funded, now that Russia is facing increasing sanctions from Europe and the United States.

Despite these setbacks, the Sino-Russian economic relationship remains strong via the energy sector. “There is enormous internal impetus and room for expansion,” Wang said of the economic benefits of cooperation. While Russia turns increasingly to Asia in order to counteract economic pressures from the West, China is building its 21st century Silk Road. Deals like the Power of Siberia and Altai pipelines fall directly under President Xi Jinping’s “One Belt, One Road” strategy.

The pipeline will also further reduce China’s dependence on easily-blockaded sea lanes, such as the Suez Canal in the Middle East and the Strait of Malacca that connects the South China Sea with the Indian Ocean, for the transport of vital fuel.

(Photo courtesy of BP p.l.c.)