US KHATYN: President Vladimir Putin on Monday presided over the start of construction work on a pipeline which is planned to ship 38 billion cubic metres (bcm) a year of Russian gas to China, ramping up from 2019.

The 4,000 km Gazprom “Power of Siberia” pipeline is a key part of the Kremlin’s energy strategy, symbolising Russia’s attempts to wean itself off dependence on European markets that account for most of state-controlled Gazprom’s exports.

“Just now, we along with our Chinese friends are starting the biggest construction project in the world. There will be nothing similar in the world in this area (energy construction) in the near future,” Putin told a Chinese delegation and a group of Gazprom workers.

He added the first gas pipeline between Russia and China: “Will not only allow us to export gas, but to develop gas infrastructure in our country, to speed up (economic) development, not only in this region, but in the whole country.”

Russia has increased efforts to strengthen its economic ties with Asia because of the crisis in Ukraine, which has brought East-West relations to their lowest level since the Cold War.

In May, Gazprom and China National Petroleum Corp (CNPC) signed a $400bn deal to ship nearly 40 bcm of gas to China annually over 30 years. The long-awaited deal was a diplomatic coup for the Kremlin after a decade of difficult negotiations.

Gazprom said on Saturday it planned to launch its Chayanda gas field at the end of 2018, aiming to ship the first gas to China in 2019. Chayanda is one of the keys to supplying China and will produce up to 25 bcm a year at its peak.

Published in Dawn, September 2nd , 2014