China Winning the Race for Central Asia’s Energy Riches

OilPrice.com ^ | 23/06/2011 | John Daly

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Many western analysts have described the post-Soviet tussle for Caspain and Central Asian energy reserves as the new “Great Game, except this time around, Russia is facing the U.s. rather than the British empire.

To a dispassionate outside observer however, what is most striking about the prolonged wrangle between Moscow and Washington for hydrocarbons, military bases and influence is the emergence of an understated sly newcomer who has managed to bag many of the region’s assets – China.

There are many reasons for this, despite the fact that both Russia and the U.S. both seemed to hold winning hands.

For Moscow, quite aside from its colonialist legacy was the fact that it controlled the Truboprovodnaiia sistema Sredniaia Aziia-Tsentr (the Central Asia-Center, or SATS, pipeline system.) Russia’s natural gas monopoly Gazprom controls the SATS complex of pipelines, which run from Turkmenistan via Uzbekistan and Kazakhstan to Russia. The SATS eastern branch consists of SATS-1, 2, 4 and 5 pipelines, which were built between 1960 and 1988. Construction began after the discovery of Turkmenistan's Dzharkak field, with the first SATS section coming online in 1960, while SATS-4 was commissioned in 1973. Simply put, after the 1991 collapse of the USSR, Central Asia’s only opportunity for energy exports was controlled by Russia, which was determined to obey its new-found capitalist mantra of “buy cheap and sell dear.”

And where did Gazprom sell its Central Asian natural gas? Full article: China Winning the Race for Central Asia’s Energy Riches