Siberia pipeline odyssey

Putin signed an accord with Japan on the Siberian pipeline

China had negotiated and reached a deal with Yukos to build a pipe line from since 1992, from Angorsk via Chita to Daqing (yellow line). Unfortunately when Yukos was nationalized the deal was terminated. Japan has then seized the opportunity and tried to shut China out and the current pipeline was proposed (with a detour to north of Lake Baikal due to environmental concern - Baikal is the deepest lake (1637m or 5369 feet!) in the world and perhaps also the cleanest large lake remains on earth, the shaded areas are natural reserves oir national parks. It is also for environmental reason that the terminus was changed from Vladivostok/Perevoznaya Bay to Nakhodka).

Here is another myth that I scratch my head very hard:

  • I can understand why Japan can be concerned about the pipeline passing through China, even though the route is shorter and the cost cheaper, because the Koizumi regime's general hostility and distrust on China. However, why does Japan try so hard to shut China out? The "reason" Japan provided is China will "siphon" away the oil at upper stream (they learned a lot from Saddam, it seems). But don't the Russian make the decision of which branch it open the taps to? Don't price and market determine who gets the goods? It should be noted that China does not try to shut Japan out, it just wanted a branch to deliver the hydrocarbon to Daqing.

Putin is not Chen Shui Bian or Annette Lu, he knows the more customers he has the better price he can command. He wants to be able to sell his oil to everybody, not just China, also to Korea and US via Nakhodka.

Had the Angarsk-Daqing line been completed, there would have been much less pressure on world oil demand because China could shift its sourcing to the extra capacity Russia has. Maybe we could all have been able to enjoy cheaper gas. Japan's bullying has hurt the world's oil importers including itself, as it has paid a lot more to import oil at a higher price today.

Update SEP/2006: Dili blog


Anonymous said...

Is that finally final? Mr Putin has kept sending inconsistent messages.

Sun Bin said...

should not change much. russia is very clever in resolving this problem.

the key here is
1. russian to build the first phase to a point near China border, on surface both china and japan should be happy. in reality japan is very disappointed, because all it does is connect the pipeline to china border.
2. then it is up to China to connect from there to daqing. china will have to use truck or fund its own portion of the line. that is fair.
3. from svorodino to nokhodka, let's worry about that later. this is japan's problem. russia can squeeze more from japan and even wait for some of japan's promise to realize.

if you see this from russia's perspective, it makes perfect sense to them.

Sun Bin said...

yeah, i agree koizumi is quite mild and china may wish koizumi will work a few more years:) he is more pre-occupied with re-establishing the old japan and china is just one of the rocks in his way.

a closer analogy is probably how SW US is hispanized today. (rather than texas secession 200 years ago)
but there are some problems
1. the living condition in russia side is a lot harsher
2. the income from the chinese side may be higher than that in russia side soon and there will be less incentive for mass immigration
so it doesn't work in China's favor as much. if i were Hu i would abolish one child policy, at least in Manchuria.

Elam Bend said...

Sun bin,
When you compare all the Chinese in se Russia the hispanics in SW US, do you mean to say they are becoming part of Russia? Russian deparately needs the people. However, couldn't this give an irredentist future China an excuse to help them gain 'autonomy'?

Sun Bin said...


yes, both could be possible.
but with such possibility, it is probably a better solution than continued border dispute and perhaps even large scale war.
this is the upside for china's reaching a border deal with russia.

hopefully, business integration would supersede nationalism or conflict due to seeking autonomy. and such integration would lift the quality of life for the russians as well (as it already does). the ideal scenario is that economic integration will marginalize the issue of border and equality will marginalize autonomy or racial tension (like US today). this will be a win-win situation.