China, Russia to boost energy cooperation
Updated: 2013-03-26 11:02
China and Russia have been expanding their trade and economic ties over recent years, with energy cooperation forming a large portion of the comprehensive strategic partnership between the two major emerging economies.
China is the world's largest energy consumer, while Russia is the world's largest energy producer. Add to that the geographical proximity, cooperation on the energy front between the two BRICS economies comes natural.
Ji Zhiye, president of the China Institute of Contemporary International Studies says such cooperative efforts are conducive to China-Russia ties.
Ji Zhiye said, "China and Russia are complementary in the energy sector. Based on mutual trust, it's normal for them to join hands. And this will in turn consolidate the strategic partnership between the two countries."
Russia started its crude oil supplies to China through the East Siberia-Pacific Ocean pipeline on Jan 1st 2011.
Currently, the Roseneft supplies 300 thousand barrels of oil to China each day. The number could be doubled as the giant is seeking to finalize another deal. But in comparison, negotiations in natural gas have hit some speed bumps.
Adi Karev, Deloitte's Global head of oil and gas says there are two dynamics at play.
Adi Karev said, "One is about the prices and the other is the pipelines."
The world energy structure is undergoing profound changes. A major factor is the shale gas revolution, which is actively pushed by countries like the United States and China.
Russia, 60 percent of whose fiscal revenues comes from oil and gas exports, might lose its footing and a loss of petrodollars may follow soon. But experts believe that will NOT weigh on energy cooperation between China and Russia, at least in the short term.
Ji Zhiye said, "Although China has huge shale gas reserves, it lacks advanced exploitation technology. In addition, there are environmental concerns. I don't think the time is ripe for the large-scale commercialization of shale gas. And as China is promoting the use of clean energy, importing natural gas from Russia is still a good choice."
Apart from oil and gas, China and Russia also cooperate in electricity and nuclear power plants. Experts say there is huge potential to grow.