Caspian Report - Issue: 08 - Fall 2014

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Kazakhstan President Nursultan Nazarbayev, Chinese President Xi Jinping and former Turkish Foreign Minister Ahmet Davutoglu speak at the 4 th CICA summit. MESUT HAKKI CASIN 96 role of the “pivotal actor to Asia” Has the Kremlin obtained full and unequivocal support from Beijing, presenting a common front against the US In a statement on 2 March 2014, a Chinese Foreign Ministry representative explained that Beijing holds a “long-standing position not to interfere in others’ internal affairs”, adding that: “We respect the independence, sovereignty and territorial integrity of Ukraine.” 18 First, China was sending a critical message to Tibet and Taiwan. Secondly, by the staying in middle of the road, China aimed to put pressure on Russia. While Russia vetoed the 15 March 2014 U.N. Security Council resolution condemning Crimea’s referendum on secession from Ukraine, China only abstained. 19 In spite of this position, Putin has expressed gratitude to Beijing. This manoeuvre enabled China to use the Kremlin’s isolation from the US and EU to gain better terms in energy contract. China is increasing trade links and establishing “strategic partnerships” with all five Central Asian countries; BP found that in 2013, Turkmenistan supplied China 24.4 bcm of natural gas, Uzbekistan supplied 2.9 bcm, and Kazakhstan supplied 0.1 bcm. This accounts for more than 45 percent of Chinese gas imports and translates into roughly $2.5 billion in annual revenue between the three Central Asian governments. On June 15, China inaugurated another line of the Central Asia-China gas pipeline, which will run from Turkmenistan through Uzbekistan and Kazakhstan to western China. It is slated to carry 25 bcm of gas. An 18. “Kerry travels to Kiev as Russian troops remain in Crimea”, Anadolu Agency, Ankara, 3 March, 2014, http://www.aa.com.tr/en/news/296146--kerry-travels-to-kiev-as-russian-troops-remain-in-crimea. 19. Liu Jieyi, Permanent Representative of China to the UN, said after the vote that Beijing sought a “balanced” solution to the conflict within a framework of law and order. He called for the creation of a coordination group, a support package for Ukraine, and also called on countries to refrain from action which could further escalate the conflict.
additional pipeline of similar capacity is due to be completed later in the year. The new lines, along with the increased production in Turkmenistan, will increase the total capacity through the Central Asia-China pipeline to 65 bcm annually. That far exceeds what Russia will supply annually to China. 20 During his keynote speech at the 4 th Summit of CICA-Conference on Interaction and Confidence Building in Asia, 21 Chinese President Xi Jinping proposed creating a mechanism for Asian security cooperation based on the foundation of CICA. In other words, he proposed creating a security cooperation mechanism for Asian nations that excluded the United States. China’s proposal is a direct counter to U.S. plans for the creation of an “Asian version of NATO” with the U.S.-Japan alliance at its centre. Just as NATO targeted the former Soviet Union as its main foe, the Asian version of NATO, as advocated by the certain circles in the United States and Japan, plans to create a security mechanism in the Asia Pacific region aimed at China and North Korea. 22 In one further step, Russia is ready to control the relations with the U.S. and the EU, but it is not easy to manage China’s power in Eurasia, which may result in uncertain developments in the future. This critical contract has secured Russia a share of the world’s fastest growing gas market and laid the basis for its participation in future Asia- Pacific coast LNG projects. Because most important concerns will effect the over-dependence on China and will reinforce Russia’s focus as an exporter of natural resources and hold back the development of ENERGY HUNGRY CHINA CURRENTLY FAVOURS COAL AND OIL IN ITS NATIONAL ECONOMIC DEVELOPMENT MODEL. high-technology balance in the next decades. In connection with this, US, Australian and Canadian lawmakers have expressed concerns over a new multibillion dollar gas deal between Russia and China, urging Washington to take action over the case on exports of LNG to Europe, so that they have alternative sources. 23 As a result, for Russia, the gas contract with China meant gaining access to new strategically promising Asian markets, showing a readiness to develop new gas fields and winning a major bargaining chip in its talks with European consumers, who are bearish on gas prices amid a shale gas revolution. 24 CHINA’S ENERGY ADVANTAGES Energy hungry China currently favours coal and oil in its national 97 CASPIAN REPORT, FALL 2014 20. Reid Standish: “Hungry for Gas, China Muscles Onto Russian Turf”, Foreign Policy, 20 June 2014, http:// www.realclearenergy.org/2014/06/20/hungry_for_gas_china_muscles_onto_russian_turf_261927. html 21. CICA is a regional forum started through Kazakhstan’s initiative in 1992, and is composed of 26 member nations, including China, Russia, all the Central Asian countries and some Southeast Asian countries. South Korea is a member country, while the United States and Japan have observer status. 22. “China-Russia Alliance Threatens U.S. Hegemony”, 3 July, 2014, http://zoominkorea.org/ china-russia-alliance-threatens-u-s-hegemony/ 23. “US lawmakers worried about Russia-China gas deal”, Press Tv, http://www.presstv.ir/detail/2014/05/25/364102/us-worried-about-russiachina-gas-deal/, Babs McHugh: “Russia China gas deal threat to Australian LNG ‘underestimated’”, ABC Rural, 28 May 2014, http://www.abc.net.au/ news/2014-05-28/russian-gas-threat-for-australian-producers/5484124. 24. “Vladimir Putin in Shanghai: Russia Is Turning East”, Valdai Club, 23 May, 2014, http://valdaiclub.com/ asia/69045.html
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CASPIAN PUBLISHED BY CASPIAN STRATE
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Dear Readers, CASPIAN REPORT 2 It i
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CASPIAN CASPIAN REPORT 4 06 FATIH M
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FATIH MACIT, HOLLY REHM 6 THE U.S.
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FATIH MACIT, HOLLY REHM 8 shale rev
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FATIH MACIT, HOLLY REHM 12 SINCE TH
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FATIH MACIT, HOLLY REHM 16 LNG’s
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MANFRED HAFNER 20 THE SOUTHERN GAS
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MANFRED HAFNER 22 THE DOCUMENT RECO
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MANFRED HAFNER 24 Notwithstanding t
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MANFRED HAFNER 26 TANAP, A PROJECTE
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MANFRED HAFNER 28 by the Shah Deniz
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MANFRED HAFNER 30 Snam Rete Gas has
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MANFRED HAFNER 32 THE ESTABLISHMENT
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MATTEO VERDA 34 LNG MARKET: TRENDS
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MATTEO VERDA 36 traditionally accou
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MATTEO VERDA 38 bcm), Brunei (9 bcm
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MATTEO VERDA 40 for transport vesse
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MATTEO VERDA 42 of the global LNG m
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MUBARIZ HASANOV 44 AN OVERVIEW OF E
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Page 124 and 125: ARZU YORKAN 122 THE STRATEGY PAPER
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Page 138: CASPIAN CALL FOR PAPERS 136 Caspian
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Caspian Report - Issue: 08 - Fall 2014

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