$30 Billion Oil Pipeline to Be Built from Russia to India through Northwest China

Talks on the construction of the Russia to India oil pipeline project should conclude by mid-2014, officials from ONGC said.

Thus, Russia is changing its energy export policy vector as strong demand for hydrocarbons, both in China and in India, one of the largest economies in the world, continues to grow. The benefits are obvious, including those in connection with India’s plans to become a member of the Shanghai Cooperation Organization (SCO). China supports the pipeline oil supplies to India, which is not surprising. One of the project’s options is the construction of a pipeline from the Altai region through the north-west of China to the north of India. Director of the Center for Strategic Studies in Energy of the People’s Republic of China, Xia Yishan says, “The project is beneficial for both India and China, as it would allow China to become an oil transit in addition to its ‘status’ of recipient of the Russian oil.” For Russia, the project’s additional benefit is providing oil to the SCO market.

In addition to that, the EU complains about the low domestic prices for oil and gas in Russia, that is why many goods manufactured in Russia are taxed by antidumping restrictions. Timur Nigmatullin, analyst in Investkafe said, “The use of so-called energy corrections by the European Union looks like an attempt to level one of our economy’s key competition advantages. This approach introduced unjustified anti-dumping duties, which is why Russian businesses annually lose more than $600 million.”

In short, there is a need for new markets, especially those where integration processes with Russia’s participation are developed. This is primarily the SCO. “The growth of mutual investments by Russia and China is accompanied by greater activity of the Russian and Chinese business in other SCO countries, – said the president of the International Organization of Creditors Robert Abdullin. “Economic growth in these countries is more favourable than it is in the industrialized countries.” Countries like India, Pakistan, Mongolia, Vietnam and their neighbours would naturally be attracted to working in close partnership with the SCO, including a partnership in the energy sector.

(Global Research Edited by Topco)