Monday, December 21, 2009

China's Gas Pipeline Reaches deep into Central Asia, bypassing Russia

China has quietly rewritten the geopolitical landscape in Central Asia in recent years, breaking Russia's monopoly over the export of the region's energy resources also coveted by the West, experts say.

The proof came last week when Chinese President Hu Jintao travelled to the region for the inauguration of a natural gas pipeline snaking from Turkmenistan through Kazakhstan and Uzbekistan into China's far western Xinjiang region.

"This creates a regional dynamic for China," said Thierry Kellner, a researcher at the Brussels Institute of Contemporary China Studies.

"In the 1990s, no one thought that China would become such an important player."

Tom Grieder, an analyst at IHS Global Insight, said in a research note: "The pipeline project is important for China as part of its broader strategy of stepping up energy investments in Central Asia to gain access to resources."

Energy-hungry Beijing's campaign to secure a solid foothold in Central Asia -- a vast resource-rich region nestled between Afghanistan, China, Russia and Iran -- mimic its efforts in Africa, where its presence has exploded overnight.

Jean-Pierre Cabestan, a professor and China expert at Hong Kong Baptist University, said Beijing had used "the same methods, but on a more modest scale" in Central Asia that it has employed in Africa.

Those methods include increased trade, investments in energy resources and installations especially Kazakh oil and gas, loans at advantageous rates and a willingness to tackle projects the West has deemed too costly or difficult.

"Chevron also wants a stake in Turkmen natural gas. But the Western firms have only progressed to the negotiations phase," Kellner said.

For Cabestan, "China has opened up Turkmenistan, a closed regime, by managing to shatter the quasi-monopoly of Russia... which does not look too kindly on these developments."

"This is the result of an economic and trade dynamism seen in China, and also its diplomatic skills in handling regimes, some of which are not democratic," he added.

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