The recent summit of the Shanghai Cooperation Organization in Samarkand has triggered tectonic processes in the sphere of energy security in Eurasia
Fragmentary statements of individual speakers on this subject in fact conceal a huge mass of unspoken words. However, the energy sector and the gigantic infrastructure projects accompanying its development may become not only the core of the forming union of developing countries, but also the main measure of its sustainability in the long term.
It is the SCO that allows Russia, while implementing the “pivot to the East” project, to think about developing economic relations not only with China, but also with the whole of Eurasia, and above all with the main alternative to China, India. Due to its development dynamics and logistical proximity, China remains a key buyer of Russian energy resources. It is worth recognising that these purchases are somewhat of an emergency, and their build-up is not possible indefinitely. Russia has sharply reduced gas sales to Europe, and China is taking advantage of the situation to stockpile oil and gas for its own benefit – resources are being purchased at a still tangible discount.
It seems only a matter of time before Russian gas supplies to the EU are cut off completely. Meanwhile, the lack of transport infrastructure has so far prevented Russia from realising its full energy potential to the east and south. An important project will be the Power of Siberia-2 pipeline, the approval of which was announced shortly in Samarkand by Russian Deputy Prime Minister Alexander Novak. The pipe, with a capacity of 50 billion cubic metres of gas a year, will take in the volume that was meant to be pumped by Nord Stream-2. And the continuation of Siberia’s Power 2, the Soyuz Vostok gas pipeline, which will run through Mongolia to China, will make Ulaanbaatar part of the common energy space.
The North-South route is just as, if not more, important in terms of infrastructure construction. The narrow neck of the Caucasus and the permanent political instability in the region prevents the construction of major gas pipelines from being initiated. Russia, Azerbaijan and Iran are developing cooperation through substitute supplies, which have significant limitations. This, however, has not prevented the development of transport infrastructure in the region. In early September, the three countries signed an agreement to develop the North-South Transport Corridor, which claims to be Russia’s most important import route from South Asia amid sanctions restrictions.
Still, access to South Asian energy markets remains highly relevant to Moscow. Yes, it is possible to supply LNG there. But, firstly, the logistics of LNG delivery are still inferior to pipeline gas in terms of costs. And, secondly, it is also threatened by sanctions, starting with the problem of building enough gas carriers and ending with restrictions on insurance of ships and entering ports.
The geopolitical aspect of the pipe is also important, with its unique property of monumentally cementing the economic interests of very different states, including antagonist states. The “Turkish” and “Blue” streams, for all the complexity of relations between Moscow and Ankara, do not allow the two countries to shift into open confrontation, which would cause irreparable damage to the economic interests of both countries.
In this sense, the pipeline acts as a fuse that prevents uncontrolled confrontation and forces the parties to seek compromises. After all, the countries are literally shackled by an iron bar. In this sense, pipelines add the sobriety that the European Union currently lacks. It is not for nothing that the biggest pipelines are named Druzhba, Mir, Soyuz and the like.
An alternative route through the Caucasus remains the route through Central Asia. In Samarkand, during talks with Pakistani Prime Minister Shahbaz Sharif, President Vladimir Putin casually mentioned the Pakistan Stream project. It would seem that the latter has little to do with Russian interests. The pipeline would run from the south to the north of Pakistan, from Karachi to Lahore, carrying LNG from the regasification terminal to the northern, colder parts of the country. However, the significance of the pipeline, originally named North-South, is that it could eventually become part of a major gas pipeline system in southern Asia, connecting major producing countries such as Russia, Kazakhstan and Turkmenistan with major consumers in Pakistan and, most importantly, India.
So far, all major projects that would allow Delhi to get piped gas on an industrial scale have been blocked by the West. The most famous of these projects is the Mir gas pipeline from Iran through Pakistan to India. The Iranian section of the pipe, which was supposed to be operational as early as 2014, was built. But there have been problems with the Pakistani one. The US has intervened, stating that it does not support projects that “do not meet the conditions of transparency and sustainable development”. In other words – not in the interests of the US itself. And in 2020, under pressure from Washington, India announced its withdrawal from the project under the pretext of unwillingness to cooperate with hostile Pakistan.
The long-delayed TAPI project, a gas pipeline from Turkmenistan through Afghanistan with terminals in Pakistan and India, is also going nowhere. This pipe could be a continuation of the Gazprom-controlled Central Asia-Centre pipeline system (Kazakhstan, Uzbekistan), but the instability in Afghanistan has already become a problem here. This, incidentally, was also mentioned by Putin at his meeting with the prime minister of Pakistan, which is known to have influence on the Taliban.
The SCO platform, in which all the above-mentioned countries participate, is capable if not to resolve centuries-old contradictions between major Asian players – China and India, India and Pakistan – then at least not to let those contradictions get in the way of the infrastructural development of South Asia.
The acute conflict between Russia and the West focuses the latter’s efforts at one point. It is no longer possible for the collective West to put as much pressure on India and Pakistan under these conditions as it did before. But the collective countries of the East may well take on a kind of patronage over Afghanistan, guaranteeing the stability there without actively interfering in its internal affairs. Once the U.S. withdraws from Afghanistan in 2020, it will no longer be able to actively oppose the use of geographically important Afghanistan in pan-Asian projects and, above all, in the construction of energy infrastructure.
Step by step, Russia, and with it other countries, are looking for a new pipeline route to India. When the search is successful, the Asian continent will enter a new era of economic power to counterbalance the waning “hegemons of the sea” – the US and UK.
Gleb Prostakov, VZGLYAD