Turkmenistan continues search for investment in TAPI

bne | May 6, 2013

Turkmenistan is persevering with efforts to persuade an international oil major to join the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project, according to reports in India, despite being unwilling to give up a stake in its gas fields to potential investors.

A series of road shows in New York, London and Singapore in the autumn, aimed at attracting international oil and gas companies to the project, ended in failure, even though companies including Chevron, Exxon Mobil, BP, BG Group, RWE and Petronas attended. That disappointment flew in the face of claims from Turkmen officials that they had all expressed an interest in the project, which carry gas from the secretive Central Asian state via Afghanistan to the Indian sub-continent.

Ashgabat’s refusal to allow participating companies to take a stake in the Turkmen hydrocarbons fields that would fill the pipeline has been cited as the main reason for the flop, although the continuing instability in Afghanistan is another factor.

India’s Economic Times cites an unnamed Indian government official as saying that, as the four participating countries prepare for a meeting on May 15, Turkmen officials continue trying to persuade an unnamed international oil major to take part. “Our understanding is that [Turkmenistan is] quietly working with international oil companies to work a way around the question of upstream stake,” the official said.

However, he also noted that the ban on sales of stakes in Turkmen fields to foreign buyers remains a sticking point. “They have told us that they have passed a law after the Chinese were given a stake and this now does not allow them to give a stake to anybody else in the gas fields,” the official said. It’s unclear to which deal he was exactly referring.

Ashgabat is secretive over its agreements in the oil and gas sector. In 2007, China’s CNPC was given the right to develop the Bagtyyarlyk gas field, which supplies the Central Asia-China (CAC) gas pipeline exporting to China. However, the level of access Bejing enjoys to the Galkynysh (previously South Yolotan) gas field remains unknown after the Chinese State Development Bank pledged $4.1bn to help develop it in 2010. On the one hand, it’s thought Turkmenistan may have signed over a stake. Other speculation suggests Ashgabat has offered no more than a firm commitment that CAC is filled.

Either way, India is clearly pushing for a similar level of security. It has been pushing for an equity stake in the massive Galkynysh for itself, to ensure supply issues do not compromise the massive financial commitment needed to build TAPI. Indian officials say that since CNPC has been given access to upstream assets in Turkmenistan, India’s state owned GAIL should have the same privilege.

At the same time, the four states participating in TAPI have maintain that they aim to start construction of the pipeline, which has support from the Asian Development Bank, by the end of 2013. However, on top of the jockeying between themselves, they are trying to drum up support from international oil companies to invest in the project, which may cost as much as $12bn.

Agreements on the price of gas exports to Afghanistan, India and Pakistan have already been signed. In September, the four participating governments agreed to proposal from Turkmenistan to set up a company with shared capital of $20m to carry out a feasibility study and design the pipeline.

In a $100 million move to counter China, India to upgrade Iran’s Chabahar port

By Nidhi Razdan | NDTV | May 4, 2013

Tehran: In a strategically significant move to counter China’s presence in the region, India has announced that it will upgrade Iran’s crucial Chabahar port that gives a transit route to land-locked Afghanistan.

India’s decision was conveyed by Foreign Minister Salman Khurshid in Tehran today during his meeting with his counterpart.

An expert team from India will visit Iran to assess investment needed for the upgrade of the port on the Iran-Pakistan border facing the Arabian Sea. Sources say an investment to the tune of $100 million is required for the upgrade.

The move comes despite strong pressure from America, which doesn’t want any investment in developing infrastructure in Iran to put pressure on the Western Asian country over its covert [sic] nuclear programme. But India has been worried and keen to open an alternative route to Afghanistan ever since China took over Pakistan’s Gwadar port in the region, which is just 76 km from the Chabahar port.

Chahbahar port, which is surrounded by a free trade zone, is crucial particularly since Pakistan does not allow transit facility from India to Afghanistan.

India will also discuss ways to increase trade with Iran as it is concerned over the “grave” imbalance. The two-way trade is around US $15 billion, out of which Indian exports account only for around US $2.5 billion.

Oil is the biggest item of Indian import from Iran but India feels there is a lot of scope for increasing Indian exports to the Persian country particularly in pharmaceuticals and food.

However, efforts to enhance trade have been facing hurdles because of sanctions imposed by the UN and European Union, which make payment difficult.

There are also problems like re-insurance of oil refineries and transportation of consignment from Iran because of the sanctions.

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Russia expects progress in Iranian nuclear talks

Xinhua - 2013-04-03

MOSCOW – Moscow hopes proposals made by world mediators to Iran over its nuclear program could lay the foundation for negotiations on solving the problem, Deputy Foreign Minister Igor Morgulov said Wednesday.

Russia was “closely coordinating” with the P5+1 group, which includes China, France, Russia, the United Kingdom, the United States and Germany, on the Iranian nuclear issue, Morgulov told the Interfax news agency.

Moscow expected “an updated package of demands” given by the Sextet to Iran during the late February Almaty meeting could lay the foundation for “consistent progress” in the nuclear talks, Morgulov said.

The parties held expert-level nuclear talks in Istanbul in late March to discuss a revised proposal that asks Iran to suspend its enrichment of uranium and disable the underground Fordow facility in exchange for limited sanction relief.

The next round of nuclear talks is scheduled for April 5-6 in Almaty, Kazakhstan.

Russia believes a long-term settlement towards the Iranian nuclear issue should be based on the recognition of Iran’s “unconditional right to develop its civilian nuclear program,” Morgulov said.

Meanwhile, Russia highly values close dialogue with China over the Iranian nuclear program, as the two countries shared common positions in many aspects, he added.

Russia, together with China, believe the use of unilateral sanctions and political pressure on Iran only lead to a dead end, Morgulov said, adding that such moves were counterproductive and undermined diplomatic efforts in solving the problem.

Chinese tanker loads Iranian crude for first time since EU ban

Press TV – April 3, 2013

A Chinese supertanker loaded crude from Iran’s largest export terminal in late March, for the first time since Europe enforced sanctions on Iranian oil shipment insurers in July 2012.

According to shipping data and a Chinese industry official, the Yuan Yang Hu supertanker, able to haul 2 million barrels of crude, docked at Kharg Island on March 20-21 and is currently en route to China.

The vessel is owned by Dalian Ocean, a subsidiary of state shipping giant China Ocean Shipping (Group) Company (COSCO).

At the beginning of 2012, the US and the European Union imposed new sanctions on Iran’s oil and financial sectors with the goal of preventing other countries from purchasing Iranian oil and conducting transactions with the Central Bank of Iran.

China has relied mainly on the National Iranian Tanker Company (NITC) to ship Iranian crude to Chinese refineries over the past nine months.

According to Chinese customs data, China imported about 410,000 bpd of Iranian crude in the first two months of 2013, a figure which is 3 percent higher than one year earlier.

The US has spearheaded several rounds of Western sanctions against Iran in recent years, based on the unfounded accusation that Iran is pursuing non-civilian objectives in its nuclear energy program.

Iran rejects the allegations, arguing that as a committed signatory to the Non-Proliferation Treaty (NPT) and a member of the International Atomic Energy Agency (IAEA), it has the right to use nuclear technology for peaceful purposes.

Related article

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Iran Abandons Chinese Help, to Build World’s Highest Hydroelectric Plant Alone

By John Daly | OilPrice.com | April 1, 2013

Iran, pummeled by years of international sanctions, has had two energy goals.

First, to preserve its dwindling international hydrocarbon market share, increasingly battered by years of U.S. and UN sanctions designed to slow down and halt its civilian nuclear energy program, which Washington and Tel Aviv have long insisted masks a covert program to develop a nuclear weapons program.

The second, much less reported in the foreign press, is to diversify its indigenous energy infrastructure, so as to preserve its hydrocarbon assets for the long term.

In pursuit of the latter goal, Iran is ramping up its hydroelectric program.

Iran currently has 23 operational hydropower plants, with a combined electricity generating capacity of 8.2 gigawatts, 14 percent of the nation’s total generating capacity of 58.5 gigawatts. A further 4.8 gigawatts of capacity is under construction, with 12.7 gigawatts of hydro capacity either undergoing feasibility study or in the early design stages.

The centerpiece of Iran’s hydroelectric ambitions is the $1.5 billion Bakhtiari Dam and Hydroelectric Power Plant in southwest Iran across the Bakhtiari River in the Zargos mountains in Iran’s western Lurestan province, with a capacity of about 169 billion cubic feet of water.

Due to open in 2014, the Bakhtiari Dam HPP will be the tallest dam in the world at 1,033 feet, surpassing China’s 1,000 foot Jinping-I Hydropower Station. The Bakhtiari HPP will be a double-arch concrete dam, creating a reservoir with an area of 5,900 hectares, with six 250 megawatt turbines providing a generating capacity of 1.5 gigawatts.

Feasibility studies for the Bakhtiari Dam HPP began in 1996, but ongoing problems saw a design team comprising Iranian and Swiss consultancies appointed in May 2005. The most notable delay was caused by the 2002 liquidation of the German contractor originally appointed to build the scheme. Tightening international sanctions made Tehran’s efforts to secure international financing more and more strained.

Enter the Chinese, with Sinohydro and Iran’s Faban taking over the project in 2007, with Chinese banks to provide the estimated $2 billion financing. Two years ago a Tehran-based consulting engineer noted, “For the past year, with the financial sanctions, it has been difficult to purchase equipment for hydro projects here. Projects have been pretty much limited to using Chinese manufacturers or trying to make parts locally. This has slowed down a number of schemes, especially those that have had to change their equipment specifications midway through construction. Nonetheless, they are moving forward. Sanctions have just meant that projects won’t necessarily have the best equipment installed and may take longer and cost more.”

Iran Water & Power Resources Developer Co. is overseeing the Bakhtiari Dam HPP. Since being established in 1989, IWPCO has been responsible for the construction of all new hydropower plants in Iran.

Interestingly, IWPCO remains coy about who will manufacture the facility’s turbines. The IWPCO website states about the electrical generation power facilities, “type of generators,” only the cryptic comment, “being designed.”

Two years ago, China’s Sinohydro Corp, constructor of China’s massive Three Gorges HPP, signed a contract to construct the Bakhtiari Dam HPP, Iran’s the state-owned Assets Supervision and Administration Commission (SASAC) reported, with a projected timeline of five years to complete.

Well, something disrupted the deal, though neither side is saying, as last June Iran’s government decided to withdraw from the deal, which analysts believe may be linked to the dissatisfaction of Iran’s central bank with loan options issued by the Chinese.

Showing some admirable bravado, IWPCO’s Mohammad-Reza Rezazadeh stated that Iran is considered among the most advanced countries in dam construction and engineering.

So, will Iran’s indigenous industrial base be able to pull off the Bakhtiari Dam HPP without either Chinese expertise or funding? Given that China is currently Iran’s largest export market for oil exports, no doubt there will be some more “frank and candid” discussions, little if any of which will leak to the Western press.

John Daly is CEO of U.S.-Central Asia Biofuels Ltd

Ahmadinejad inaugurates world’s tallest dam project in Lorestan

Press TV – March 28, 2013

Iran’s President Mahmoud Ahmadinejad has inaugurated a major construction project to build the world’s tallest double-curved concrete arch dam in Iran’s western Lorestan Province.

In a Thursday ceremony in the city of Khorramabad, the president expressed gladness over launching the major project, which will be carried out entirely by Iranian experts and construction workers.

The 315-meter-tall (1,033 feet) dam has been designed to construct a hydroelectric power plant that will generate 1,500 megawatt electricity.

President Ahmadinejad described the Bakhtiari Dam project as a turning point in the path towards the development, progress and improvement of Lorestan Province.

The president added during the inauguration ceremony that the world’s tallest double-curved concrete dam is being built here by the “able hands and expertise of committed Iranian scientists and workforce.”

The dam will be built over Lorestan’s Bakhtiari River.

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UN adopts arms trade treaty

Al-Akhbar | April 2, 2013

The UN General Assembly on Tuesday overwhelmingly adopted the first-ever treaty to regulate the $80-billion-a-year conventional arms trade.

The assembly voted 154-3 for a resolution that will open the treaty for signature from June. Syria, North Korea and Iran – which had blocked the treaty last week – voted against it. Twenty-three nations abstained.

The first major arms accord since the 1996 Comprehensive Nuclear Test Ban Treaty would cover tanks, armored combat vehicles, large-caliber artillery systems, combat aircraft, attack helicopters, warships, missiles and missile launchers, as well as small arms and light arms.

It would aim to force countries to set up national controls on arms exports. States would also have to assess whether a weapon could be used for genocide, war crimes or by terrorists or organized crime before it is sold. The treaty will not control the domestic use of weapons in any country.

The vote capped a more than decade-long campaign by activists and some governments to regulate the global arms trade.

Every country is free to sign and ratify the treaty, which will take effect after the 50th ratification from among the 193 UN member states, which could take up to two years.

(AFP, AP, Al-Akhbar)

MercoPress:

23 countries, including China, Russia, Cuba, Venezuela, Bolivia, Nicaragua and India abstained.

RT:

Russia and China – which both abstained during Tuesday’s vote – said that the vague criteria defined in the document may lead it to being manipulated for political ends, with various hostile countries defined as “human-rights abusers”. Russia also wanted the document to ban the supply of arms to non-state actors, such as rebels in the recent Arab uprisings.

India, another country that refused to endorse the treaty, and a major importer of arms, claimed the treaty gave excessive leverage to exporting states, who would be allowed to unilaterally break contracts for supposed ethical violations.

Сhina considers investing $40 billion in US shale oil

RT | March 07, 2013

China National Petroleum Corporation, the country’s state-run oil major, is looking for its first stake in the US, as the three largest Chinese oil companies together plan to spend $40 billion to access US crude riches.

The announcement came on Wednesday from Jiang Jiemin, the chairman of china’s biggest oil company during the National People’s Congress in Beijing, Bloomberg reports. “We are currently studying [investing in US oil], ” Jiang Jiemin said.

Last month CNPC’s domestic competitor China Petrochemical Corporation agreed to buy a stake in an Oklahoma oil field from Chesapeake Energy for $1.02 billion.

A trend is unfolding for Chinese oil companies to use government loans to buy stakes in the US energy fields.

“Stake participation by Chinese companies in US oil fields would be welcomed,” a London-based analyst for Global Energy & Natural Resources at Eurasia Group, Will Pearson told Bloomberg. “Full buyouts will continue to be scrutinized and opposed.”

China already owns many entire oil and gas fields across Canada and Latin America, Africa and Australia. However the US is not rushing to sell off their fields, especially in the regions where military or other technology can be accessed for fear of intellectual property theft, Pearson said. In September 2012 President Obama barred a Chinese-owned company from building wind farms near a US Navy base in Oregon as a national security risk.

“The Chinese want to gain experience in shale gas, oil sands and deep water so they can redeploy the best US practices and technologies” back in China says Mirae Asset Securities Ltd. analyst Gordon Kwan.

China has already invested a record $1.52 billion purchasing stakes in oil and natural gas fields in the US this year, Bloomberg reports. China National Petroleum alone plans to double overseas production to 200 million tonnes a year by 2015.

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On Paper, China Looks Very Good

By David Macaray | Dissident Voice | February 4th, 2013

Without much fanfare, and without many people even aware of it, in 2009, China has overtaken the U.S. as the world’s leading papermaker. Moreover, they did it in much the same way that they became the world’s premiere manufacturing beast: with innovative engineering, a smart game plan, a vast reservoir of cheap labor, and massive government subsidies.

As for reaching the top of the papermaking ladder, it’s the innovative engineering aspect that’s mind-boggling. China has managed to develop a genetically altered hardwood eucalyptus tree (which begins in the lab as a tissue sample inside a petri dish) that requires only four to six years to reach full height. That’s approximately one-tenth the time it takes “natural” trees in North America (which are abundant) to reach maturity. Eucalyptus is a favored furnish in papermaking because of its soft fiber.

Each year Chinese labs clone 190 million of these “test-tube” eucalyptus sprigs, which are planted on 790,000 acres spread over several Chinese provinces. Wending Huang, Asia Pulp & Paper’s chief forester in China, calls these bad boys “Yao Mings” (referring to a famous and very tall Chinese basketball player). Wisconsin is the leading papermaking state in the U.S. Maine is second. China can now match the yearly output of Wisconsin in just three weeks.

But genetically engineered trees aren’t the whole story. In addition to new woodlands, China has established itself as the world’s leading recycler of paper. Indeed, its recycling, de-inking, re-pulping operation is staggering. China buys about 54 billion pounds a year of scrap paper and cardboard from all over the world, and uses this recycled material to produce about two-thirds of its own paper and cardboard.

As for its own paper production, according to the McClatchy News Service, China has 20 mega-sized paper mills spread across the country, and the automated machines in these state-of-the-art mills are capable of producing a mile of glossy publishing-grade paper per minute. A mile a minute. That’s 5,280 feet per minute (fpm) of a glossy, high-quality base sheet. That’s amazing.

Not to give away any trade secrets, but Machine #1 at Kimberly-Clark’s Fullerton, California, paper mill produces a 172-inch wide sheet, at 4,600 fpm. That’s a pretty good operating speed for a less-than-new machine that runs 24 hours a day, 360 days a year. But this wadding is used exclusively for Kleenex and bath tissue, and doesn’t approach the quality of “publishing-grade” paper. A high-quality, glossy base sheet is a whole other deal.

It should also be noted that China still imports the overwhelming majority of its raw timber and processed (chemically treated) pulp. It gets its timber from all over the world (e.g., Indonesia, Russia, Vietnam, Brazil). In 2011 alone, it imported 14.5 million tons of it (29 billion pounds), l.6 million tons of which came from the U.S., where sawmills, logging and pulp operations have closed down, leaving timber businesses looking for new customers.

While environmental groups have strongly objected to China’s aggressive demand for wood pulp, claiming that it’s destroying the world’s forests, American companies and Wisconsin politicians have their own reasons to complain. They accuse the Chinese government of subsidizing the country’s paper mills and “dumping” unfairly priced (too cheap to compete with) paper on the American market. Japan was accused of the same practice with its cars.

According to McClatchey, “the Washington-based Economic Policy Institute estimates the Chinese government doled out at least $33 billion in subsidies to its paper industry from 2002 to 2009—the period that coincides with its stunning growth. That’s more than $4 billion a year, a number that is growing.”

So we have U.S. paper mills being squeezed not only by foreign competitors but by foreign governments subsidizing those competitors. It must be nice having your own government as partner and benefactor. One of the obvious advantages is that the government can print all the money it wants. That can be very helpful.

The third complaint—along with environmental concerns and “dumping”—is reserved for labor unions. They blame the unions for wanting decent wages and benefits. Attacking working people, those at the very bottom, should come as no surprise. It’s Newton’s First Law of Fecal Gravitation on an Inclined Plane (Shit rolls downhill).

~

David Macaray, a Los Angeles playwright and author (It’s Never Been Easy: Essays on Modern Labor), was a former union rep. He can be reached at: dmacaray@earthlink.net.

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Toothless sanctions? Iranian oil trade booming, China top buyer

RT | January 31, 2013

Iran has quickly found ways to circumvent the EU sanctions imposed on its oil trade in July. After dipping sharply in summer of 2012, Iranian crude oil exports rose again by the end of the year.

­So far, Iran’s December crude oil sales were the highest recorded since the sanctions were first imposed. Iran exported 1.4 million barrels per day (bpd) in December, compared to less than 900,000 bpd in September. Pre-sanctions oil exports stood at 2.2 million bpd in late 2011.

EU sanctions, introduced in January 2012 and put into effect in July, aimed to curb Iran’s ambitious nuclear program, which Tehran has insisted is only for peaceful purposes. The Iranian economy is heavily dependent on oil sales – the cuts in production lead to billions of dollars in lost revenue and a plunge in the value of the national currency.

Analysts believe that sales to Asia and the expansion of Iran’s tanker fleet helped the Islamic Republic circumvent the sanctions. In countries like China, India and Japan, Iranian oil constitutes more than 10 percent of the total crude supply – and demand from Asia is only growing.

“China is saying let’s up the numbers because no-one is doing anything about it and it looks like Obama has made a political decision not to go to war with Iran,” a senior source at a large independent trading house told Reuters.

Iran is also improving its delivery channels, despite the numerous bans and restrictions imposed by the international community.

“Iran bought a number of tankers from China and can now do more deliveries. It’s taken some pressure off Iran and facilitated tanker traffic and we are seeing higher exports to China,” analyst Salar Moradi at oil and gas consulting firm FGE told Reuters.

Meanwhile, a fresh round of US sanctions looms for Iran. Starting on February 6, US law will prevent the Islamic republic from repatriating earnings from its oil export trade. The ban is in addition to the already-existing restrictions, including the country’s removal from the SWIFT global financial service and an indefinite international asset freeze.

The new sanctions are expected to reduce export volumes to around 1 million barrels per day, the International Energy Agency predicted. However, analysts believe that further sanctions will not stop Iran from selling oil or pursuing its nuclear goals.

“What we have seen is that when Iran is pushed to a do or die situation, they have looked for creative solutions to get around sanctions,” oil and gas analyst Elena McGovern of Business Monitor International told Reuters. “The system will always find a way to cope.”

The international community has been failing to engage in constructive dialogue with Iran on its nuclear program. The so-called ‘sixtet’ of ‘5+1’ states – Britain, China, France, Russia, the US and Germany – met three times last year with little to no results. The next round of talks has been stalled until a venue for the meeting is agreed upon.

“Some of our partners in the six powers and the Iranian side cannot come to an agreement about where to meet, behaving like little children,” Russian Foreign Minister Sergey Lavrov said. He stressed that Russian mediators “are willing to meet at any location.”

While the West has demanded that Iran abandon its nuclear aspirations, Iran refuses to back down: Tehran has seized every opportunity to advance its nuclear capabilities. On Thursday, Iranian officials informed the UN nuclear agency of its plan to use more modern centrifuges at the Natanz uranium enrichment plant.

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China defying sanctions imposed on Iran

By Shabbir Kazmi | January 26, 2013

The recently released data shows Iran’s crude oil exports to China soared to the second highest level in December 2012, despite US-led sanctions against the Islamic Republic’s energy sector.

According to a Reuters report China imported nearly 593,390 barrels per day (bpd) of crude from Iran in December last year, up 3.6 per cent from the preceding year and up 39 per cent from November. For the full year 2012, the highest level of China’s crude imports from Iran stood at 633,000 bpd.

Industry officials in China attributed the enhancement in Iran’s crude oil exports to improvement in shipment. The problems that used to cause delays have been overcome recently. The period of delay has become shorter and overall, less frequent.

Iran is currently China’s third largest supplier of crude, providing Beijing with roughly 12 percent of its total annual oil consumption.

At the beginning of 2012, the United States and the European Union had imposed new sanctions on Iran’s oil and financial sectors with the goal of preventing other countries from purchasing Iranian oil and conducting transactions with the Central Bank of Iran.

On October 15, 2012, the EU foreign ministers reached an agreement on another round of sanctions against Iran.

Iran terms these impositions illegal and insists that US-engineered sanctions were imposed based on the unfounded accusation that Iran is pursuing non-civilian objectives in its nuclear energy program.

According to another news report China will soon start importing polyethylene made in Iran, which became possible after the Islamic Republic partially lifted a ban on the export of petrochemicals late last year.

Lately, China-based market sources said that an estimated 100,000-150,000 metric tons of high density polyethylene (HDPE) and low density polyethylene (LDPE) from Iran is expected to arrive in China within a month aboard five vessels. The sources added that the Iranian tanker Touska will shortly discharge HDPE and LDPE at Shanghai port.

On November 6, 2012, Iranian Deputy Oil Minister Abdolhossein Bayat announced that the Oil Ministry had lifted the ban on the export of seven petrochemicals; benzene, styrene monomer, caustic soda, linear alkyl benzene (LAB), melamine crystal, premature ventricular contraction (PVC), and polyethylene.

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CNOOC, Chevron sign production sharing contracts

Xinhua | 2013-01-17

BEIJING – China National Offshore Oil Corporation (CNOOC) has signed two production sharing contracts with Chevron China Energy Company for two blocks in the South China Sea, a statement said.

CNOOC Limited, a subsidiary of CNOOC — the country’s largest offshore oil and gas producer, said in the online statement late Wednesday that the two blocks, Block 15/10 and Block 15/28, are located in the Pearl River Mouth Basin in the east part of the South China Sea.

According to the terms of the contracts, Chevron will conduct 3D seismic data surveys in the two blocks during the exploration period, in which all expenditures incurred will be borne by Chevron.

CNOOC is allowed to take up to 51 percent of interest in any commercial discoveries in the blocks, the statement said.

“We are very pleased to become a partner with Chevron again and hope this project achieves commercial discoveries soon to create economic returns for both companies,” said Zhu Weilin, executive vice president of CNOOC Limited.

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Moscow, Beijing reconnect as reset with US fizzles

By Robert Bridge | RT | January 9, 2013

Russia and China, which share many of the same international concerns, are looking to fortify their strategic partnership.

­At a time when the neighboring countries are beginning to feel the heat of the US military, it seems only natural that Moscow and Beijing are beginning to plant the seeds of a long-term strategic relationship.

Xi Jinping, the secretary-general of the Chinese Communist Party, underlined his country’s commitment to a Russian partnership when he noted that he and President Vladimir Putin “came to the unanimous conclusion” that a “comprehensive strategic partnership” between Moscow and Beijing remains the “top priority of their foreign policy.”

The comments were made on Tuesday during a visit to Beijing by Russian Security Council Secretary Nikolay Patrushev, who is participating in the eighth round of Russian-Chinese consultations on strategic security.

Xi Jingping, 59, who was sworn as the highest-ranking Communist official in November, echoed the sentiments of the Russian president, who noted at his recent Q&A session with international media that Russo-Chinese relations “have become one of the most important factors in the (realm of) international affairs.”

Given the geopolitical realities of the region, it should come as no surprise that Moscow and Beijing are looking to forge a strategic partnership.

Whereas China, traditionally an isolationist country that shuns bilateral alliances, rarely reveals its political hand, Russia made a leap of faith when it attempted to forge a so-called reset in relations with Washington. Today, the reset is in shambles, while many in Moscow accuse Washington of allowing the partnership to deteriorate.

Indeed, much of the blame for the Russia-US fallout is due to Washington’s plans to place a missile defense shield in Eastern Europe, just miles from the Russian border. NATO, originally declaring its intention to cooperate with Russia on the project, remains intransigent, while even refusing to provide Moscow with a legal guarantee that the system will never be aimed at Russian territory.

Moscow rightly warned its Western partners that without Russia’s participation in the system the strategic balance would be upset and there would be another arms race. Still, US and NATO officials have been reluctant to bring Russia on board, and this refusal has played havoc with Moscow’s and Washington’s efforts to nurture a reset between the former Cold War enemies.

In fact, given the current stalemate, the reset itself seems to have been merely a ploy to win Russia’s trust at the same time that a threatening military technology was being introduced courtesy of the Obama administration.

Meanwhile, China, which recently celebrated the launch of its first aircraft carrier (the US Navy already has six carriers assigned to the Pacific), is witnessing a growing US naval presence in the Pacific.

The US military brass announced in June that up to 60 per cent of the Navy’s fleet will be deployed to the Pacific by 2020.

At the same time, Moscow and Beijing hold similar positions on a variety of other international issues, including the situation in Syria, where militants are attempting to force President Bashar Assad from power. Russian and Chinese diplomats have called for a general ceasefire followed by negotiations, whereas the United States has thrown its weight behind the opposition.

“Moscow and Beijing both hold similar positions on the global hotspots, including in Syria, North Korea, Afghanistan and Iran,” Evgeny Bazhanov, president of the Diplomatic Academy of Russia’s Foreign Ministry, told RT in an earlier interview. “They are also both deeply suspicious of the US missile defense system.”

Finally, the China-Russia relationship is motivated by other factors aside from their increasing wariness of American geopolitical intentions.

For example, considering China’s exploding economy, Beijing requires a reliable flow of oil and gas. Russia, meanwhile, welcomes the opportunity to diversify its ample supply of natural resources.

Interstate consultations on strategic issues between Russia and China were launched in 2005.