Preliminary
With the continuous development of the "Russo-Ukrainian War" and the cutting off of European energy channels, Russia is paying more and more attention to the interests of the East.
Although China and Russia have had long-standing cooperation on oil and gas before, the existing oil pipelines are clearly unable to meet demand in the context of a comprehensive deepening cooperation.
However, just as this plan began to be implemented gradually, a sudden accident added a dark cloud to this project.
Design huge projects of China, Russia and Mongolia
This project can be said to be the result of China-Russia's "deepening cooperation" on energy purchase issues, and at the same time has many benefits for both countries.
In the past, the construction of oil and gas pipelines between China and Russia had to bypass the territory of Mongolia and enter from the northeast region, which was quite troublesome and increased many unnecessary costs.
Therefore, this time through Mongolia, the total mileage of the entire gas pipeline naturally decreased a lot, making the construction cost much lower than the original pipeline.
Essentially, the construction of this pipeline is related to Russia’s financial situation after the “Russian-Ukrainian War.”
Russia itself, as an energy exporter, relies heavily on energy exports for its finance, and its most important customer was Europe.
But since the outbreak of the “Russian-Ukrainian War”, Russia’s relations with Europe have turned sharply. Even if the “Russian-Ukrainian War” ends one day in the future, Russia has won the final victory, this phenomenon will be difficult to change.
After all, in today’s Europe, opposition to Russia has become a kind of political correctness, and so many politicians who don’t support it have to change their strategies.
Under such circumstances, although Russia attaches great importance to the interests of Europe and is more closely aligned with Europe economically and culturally, it must also turn its interests to the East.
This also brings certain benefits to Russia's national security.
Because Russia’s large infrastructure and valuable strategic targets are concentrated in the West, the attacks on Ukraine were naturally less.
And when Russia began to shift its strategic interests to the east, Ukraine was clearly “unable to strike” in the face of thousands of kilometers of distance, even if it was able to strike with long-range drones, its distant distance also reduced the scale and number of attacks.
At this point, the construction of this plan, in addition to affecting Russia itself, is very beneficial for both China and Mongolia.
Benefits of gas piping.
For China, needless to say, the energy security benefits it brings are an important reason why our country values cooperation with Russia.
Compared with the original pipeline located in the northeast, this gas pipeline is closer to inland areas and more beneficial to strategic security.
Compared to the benefits to China, the benefits of the project to Mongolia are also enormous.
As a country with an area of 1.56 million square kilometers but a population of only about 3 million, Mongolia, which is "vast and sparsely populated", is actually very suitable for building gas pipelines. Without the high land acquisition cost caused by dense population, the relatively flat terrain makes natural conditions suitable for building pipelines in Mongolia.
In fact, before Mongolia, it established a large number of oil and energy transportation routes with the Soviet Union, and even formed the famous "Mongolian Navy" in order to make use of water transportation.
Although the pipeline is barely used in Mongolia, it is basically in a transit state, but Mongolia can still get a considerable transit fee, and Ukraine played the role of Mongolia today when Russia had not broken up with Ukraine before.
In addition to being able to charge the road costs, the construction of the gas pipeline itself can provide an opportunity for the local economic development of Mongolia. Once this route is successful, the gradual deepening of future China-Russia cooperation is likely to build more lines in Mongolia, which is a favorable initiative for Mongolia's economic development.
Although Mongolia's current relationship with China and Russia is not very close, it is economically dependent on China and Russia.Many revenue comes from transit China's commodity trade, which also made Mongolia tried to build a so-called "third neighbor" diplomatic system, but ultimately still rely on China and Russia.
But this does not mean that the project will go well, on the contrary, it has suddenly occurred recently.
Stop tax deductions
In the original agreement, Russia promised to increase tax deductions for natural gas shipped by this pipeline, but recently, the Russian side suddenly claimed that this policy would not be implemented immediately, at least in three years.
This is somewhat unfavorable to this project.
The tax deduction itself can be said to be more objective under the huge amount of purchases in our country, and also make the cost of the project more calculated. Once the tax cannot be deducted, the feasibility of the project will have no small impact.
It is that Russia's sudden change in rumors has a great deal to do with the continuation of the war to date and the tightness of Russian domestic finances.
According to Putin's interview, Russia currently maintains up to 700,000 troops on the "Russian-Ukrainian battlefield", which requires Russia to provide a large amount of weapons, ammunition and logistical supplies, which makes Russia's military expenditure continue to rise.
Therefore, Russia hopes to make up for the financial problems caused by the war in various ways.
Once the project is not started, it will be a blow to the future cooperation between China and Russia.In exchange for the long-term benefits in exchange for the easing of the current financial situation, the Russian authorities have to think about it.
The "preferential suspension" of the Chinese-Russian gas pipeline project is essentially Russia's "Russian-Ukrainian war", which leads to excessive fiscal pressure and impelled helpless actions.The 700,000 army's military expenditure cracks, the European energy market's lost income gap, so that it has to delay the "tax deduction", prioritize to fill the foreseeable fiscal gap.
And the two difficulties facing Russia today are already clear: is it to sacrifice the dividends of cooperation with the East to make a war; or is it to find a balance between military spending and foreign cooperation?
This not only determines whether this trans-three-country pipeline can advance smoothly, but also related to the implementation quality of its "turning eastward" strategy.
After all, long-term energy cooperation cannot withstand the "repeated impact" of short-term financial pressure.
Source of information:
China-Russia gas deal: “China doesn’t care what the West thinks”
Network of Observers
Gazprom and PetroChina sign agreement to increase gas supply to China via the Power of Siberia pipeline
The Common Morning News
Why the construction of the China-Russia Mongolia energy pipeline has occurred new failure Multiple considerations impact project progress
The Chinese Network