China`s Hu arrives in energy-rich Central Asia

Last Updated: Saturday, December 12, 2009 - 14:15

Astana: Chinese President Hu Jintao arrived in Kazakhstan on Saturday, the first leg of a regional visit which highlights Beijing`s growing influence over Central Asia`s strategic energy resources.
Hu landed just after midday in Kazakhstan`s futuristic capital Astana, where he will attend an opening ceremony for the Kazakh section of a pipeline that will deliver Turkmen natural gas to China`s volatile western Xinjiang province.

On Monday, Hu, Kazakh President Nursultan Nazarbayev, Uzbek President Islam Karimov and Turkmen President Gurbanguly Berdymukhamedov will attend the official opening of the 7,000 kilometre (4,350 mile) pipeline in the Turkmen capital Ashgabat.

The pipeline, the first major export route for Central Asian natural gas to China, is seen as the culmination of years of quiet diplomacy by Beijing to gain access to the region`s vast energy supplies.

China has taken advantage of recent Russian foreign policy stumbles in Central Asia to boost its own influence, said Sarah Michaels, senior editor for the ex-Soviet Union at Oxford Analytica, a Britain-based think tank.

"China`s increasing presence in Central Asia is more the result of Russia`s foreign policy missteps than a directed strategy by Beijing for engaging with its neighbours," she said.

"As Russian relations.... have deteriorated over the past year, the leaders of these Central Asian states have taken advantage of opportunities to pursue more `multi-vectored` foreign policies."

Beijing has spent heavily across Central Asia this year, including a USD 10 billion (EUR 6.78 billion) loan to Astana as part of a deal that saw it take an increasingly prominent stake in Kazakhstan`s vital energy sector.

The deal, reached in April, saw China National Petroleum Company (CNPC) and state energy firm KazMunaiGas buy a stake together in Kazakhstan-based MangistauMunaiGas from Indonesia`s Central Asia Petroleum Ltd.

But the soon-to-open natural gas pipeline from Turkmenistan, which represents years of quiet lobbying and public spending, is the crown jewel in Beijing`s Central Asia policy.

Turkmenistan, an energy-rich but isolated ex-Soviet nation, is believed to have some of the biggest gas reserves in the world, nearly all of which is currently exported to Russia via a network of ageing Soviet-era pipelines.

A pipeline explosion earlier this year sparked a row with Russian energy giant Gazprom that saw exports of Turkmen natural gas almost completely cut off, prompting Ashgabat to accelerate efforts to secure alternative routes.

The EU has been anxious to exploit the rift to secure Ashgabat`s cooperation in a direct export pipeline to help ease Europe`s reliance on Russian natural gas supplies, but has struggled to win concessions.

China has been quick to act in its stead, lending Ashgabat USD 4 billion (EUR 2.71 billion) earlier this year and moving ahead on the new pipeline.

The China National Petroleum Corp (CNPC) will eventually import up to 40 billion cubic metres of gas per year through the pipeline, the Turkmen government has said.

Bureau Report

First Published: Saturday, December 12, 2009 - 14:15

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