With a gas pipeline of nearly 2,900 km Siberian strength, China and Russia motivated each other at a time when relations with the West were cold.

Siberia's strength is considered to be Russia's most important energy project since the breakup of the Soviet Union, and it fosters a new era of cooperation between the world's two leading powers.

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The $ 55-billion gas pipeline strengthens Russia-China relations Photo: Reuters

Beijing and Moscow, after years of competition and mutual suspicion, are expanding their economic and strategic partnerships, moves that have significant impact on global politics as well as trade and energy markets. world quality. At the same time, Beijing is having a trade war with Washington while relations between Russia and the West are getting colder.

"China's and Russia's synergy together convey the message that there are still alternatives to the US-led global order," said Erica Downs, a Columbia University scholar and former energy analyst at Central Intelligence Agency of America (CIA), comment.

Russian President Vladimir Putin and Chinese President Xi Jinping will chair the inauguration of the pipeline. President Xi once described the Kremlin boss as his "closest and most close friend" among the world leaders.

Russia, which owns the largest gas reserves in the world, needs money in the context of the country's economy is facing difficulties under the pressure of Western sanctions. China, the second largest economy in the world, needs fuel and is aiming to eliminate coal in production and daily life.

"China needs an energy supply and Russia has that," Putin said in October. "This is a completely natural partnership and it will continue."

Russia and China began to strengthen cooperation after the United States and European Union (EU) punished Russia for annexing Crimea peninsula in 2014. Facing painful sanctions, the Kremlin must look to shake hands with countries that don't turn away from them to minimize damage.

Russia annexed Crimea in March 2014. Just two months later, a $ 400 billion gas contract from Russia to China was signed by President Putin and President Xi.

Cooperation then expanded into the military field. In September 2018, Chinese and Russian soldiers participated in a joint exercise. This is the first time Russia has invited a country outside the former Soviet allies to participate in the largest annual exercise of the year.

Russia-China trade rose to historic levels last year, exceeding $ 100 billion, according to data from the Russian government.

In June, Chinese telecom conglomerate Huawei signed an agreement with Russian mobile carrier MTS to develop a 5G network in the country, despite being blacklisted by the U.S. and considered a "threat." threaten national security. "

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Path of the Siberian Power gas pipeline (green dashed) Photo: Gazprom

As Russia seeks to dollarize the economy, the Chinese yuan is gradually taking a larger proportion of Russia's foreign currency reserves, rising to 14.2% in March, from 5% a month. years earlier, according to the Central Bank of Russia. This change helped boost trade between the two countries as Russian businesses began to do more with China in yuan.

But the Russian-Chinese alliance is not always "smooth sailing". Cooperation may be chipped by competition for influence in areas such as Central Asia. The Russian Far East has recently witnessed protests against Chinese-funded projects such as the bottled water plant on Lake Baikal or the logging plant in Siberian forests.

Access to natural gas in Russia also provides a new advantage to China in the trade war with the US by helping Beijing reduce its dependence on liquefied natural gas from Washington.

Imports of liquefied natural gas from the United States to China continued to increase until Beijing introduced a 10% tariff last year. By the time Beijing raised its taxes to 25% in May this year, the amount of natural gas that China imported from the United States had leveled off.

"If the trade war does not happen, the US will remain a very promising source of gas supply growth for China," said Hou Qijun, president of PetroChina, China's leading oil and gas producer.

When asked about energy transactions between China and Russia, a company spokesman said it would "calculate to buy gas to suit actual needs and costs".

Russia's entry into the Chinese gas market will continue to be a major obstacle for US liquefied natural gas producers even if Washington and Beijing reach a trade agreement and agree to reduce taxes. energy.

The pipeline from Russia will "close some of the doors to US liquefied natural gas," said Anna Mikulska, an expert from the Baker Institute of Public Policy at Rice University.

The Siberian Power Project, built and operated by Russian state corporation Gazprom, will link Siberian gas fields with industrial centers in northern China, passing rugged terrain like swamps. , high mountains or eternal ice.

At Atamanskaya compressor station, where the gas will be compressed before going into Chinese territory 145 km away, engineer Pavel Vesnin is checking dozens of valves and taps in the system. "The pipe is so big that I can walk inside without having to bend my back," he said.

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Engineer Pavel Vesnin at Atamanskaya compressor station Photo: WSJ

Energy cooperation with Russia is increasing Beijing's influence in the Arctic, where the United States, Canada and several other countries are competing fiercely to master shipping routes and abundant resources here. China, though not adjacent to the North Pole, now has a share in the pie.

Beijing has invested billions of dollars in Moscow's major gas projects in the Arctic, north of the Siberian Power pipeline. China's largest shipping line, Cosco Shipping Holdings Co. is joint venture with Russian partner PAO Sovcomflot to operate a fleet of icebreakers carrying gas.

For many years, energy cooperation between Russia and China has been one of the undiscovered potentials, hampered by ideological doubts and disagreements.

An oil pipeline, discussed in the 1970s, finally came into operation in 2009. However, the process of expanding gas cooperation remains sluggish due to frequent price and lack of infrastructure.

Since the 2014 gas deal, Russia has increased oil exports to China, being able to compete with Saudi Arabia.

The Siberian Strength Project will begin exporting 5 billion cubic meters of natural gas to China this year and gradually increase to 38 billion cubic meters by 2025, equivalent to Brazil's annual gas consumption.

China is expected to become the world's largest gas importer next year and account for more than 40% of global gas demand growth by 2024, according to the International Energy Agency. With Siberian Power, Russia can meet nearly 10% of China's energy needs by 2024.

The two governments have begun work on the next section: A gas pipeline passes through Mongolia. The energy relationship is a sign of a broader geopolitical link between Russia and China, said Alexander Gabuev, an expert at the Carnegie Moscow Center Research Institute.

"Energy cooperation benefits both Russia and China, both economically and strategically," he stressed.