One Belt, One Road, and One Pipeline: Chinas New Approach to Energy - - PowerPoint PPT Presentation
XXI April International Academic Conference on Economic and Social Development One Belt, One Road, and One Pipeline: Chinas New Approach to Energy Security by Irina Semykina, UCL Important Disclaimer All conclusions are derived from data
by Irina Semykina, UCL XXI April International Academic Conference on Economic and Social Development
All conclusions are derived from data and forecasts published before February 2020. We may expect significant changes in all estimates.
Belt and Road countries are among the key world’s fossil fuels producers. They ensure 50% of
China’s search for energy security has led to the deepening political and economic relationships with energy producers and countries along the Belt and Road which have transit potential (Zhao, 2008) BRI is an important component in implementing China’s energy security strategy and serves as a mean for diversification of energy supplies and related transportation routes (Johnson, 2016) In April 2019 China announced the establishment of the Belt and Road Energy Partnership (BREP) with 30 participating countries. The BREP aims to strengthen infrastructure connectivity, facilitate energy trade and enhance energy investment by lowering investment barriers (obor.nea.gov.cn)
contracts and puts great economic and political efforts into developing inland pipeline infrastructure? 1. . The patterns of China’s energy consumption and the characteristics of China’s energy mix transformation 2. . LNG versus pipeline gas: how do different sources and means of transportation influence China’s energy security? 3. . Case of Sino-Russian energy cooperation
Source: BP Statistical Review of World Energy, 2019
US China OECD Non-OECD Total World 50 100 150 200 250 300 350 400 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013 2017
Source: BP Energy Outlook, 2019 0,0 0,5 1,0 1,5 2,0 2,5 3,0 3,5 4,0 4,5 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2020 2025 2030 2035 2040 bln toe Renewables Hydro Nuclear Gas Oil Coal
Source: BP Statistical Review of World Energy, 2019
10 20 30 40 50 60 70 80 90 65 80 95 10
Oil
10 20 30 40 50 60 70 80 90 65 80 95 10
Natural gas
10 20 30 40 50 60 70 80 90 65 80 95 10
Coal
10 20 30 40 50 60 70 80 90 65 80 95 10
Nuclear
10 20 30 40 50 60 70 80 90 65 80 95 10
Hydro
10 20 30 40 50 60 70 80 90 65 80 95 10
Renewables
Source: Gas 2018, Analysis and forecasts to 2023, IEA 50 100 150 200 250 300 350 400 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 bcm Transport Energy industry own use Residential and commercial Industry Power generation
Source: BP Statistical Review of World Energy, 2019 50 100 150 200 250 300 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 bcm Import Production Consumption
Picture: S&P Global Platts
Sea lines wartime INSECURE SECURE Pipelines wartime Pipelines peacetime Sea lines peacetime
Source: Øystein Tunsjø Security and Profit in China's Energy Policy: Hedging Against Risk, 2013
Source: BP Statistical Review of World Energy, 2019 10 20 30 40 50 60 70 80 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 bcm Pipeline imports LNG imports
Source: BP Statistical Review of World Energy, 2019
Turkmenistan 33,3 Uzbekistan 6,3 Kazakhstan 5,4 Myanmar 2,9 Australia 32,1 Qatar 12,7 Malaysia 7,9 Indonesia 6,7 Papua New Guinea 3,3 US 3 Nigeria 1,5 Russia 1,3 Other 5,2
Pip ipeli line gas LNG
Picture: Nikkei Asian Review
gas pipeline and Galkynysh gas field in Turkmenistan;
pipeline and deep- water port of Kyaukphyu;
pipeline
2014
Power of Siberia 2? Trans-Mongolian pipeline? Gazprom x CNPC Natural gas ‘Power of Siberia’ 38 bcm x 30 yrs Rosneft x CNPC Crude oil 13 mt x 25 yrs
2013
Rosneft x CNPC Oil refining in Tianjin 13 mt
2010
Rosneft x ChemChina Crude oil 2,4 mt x 1yr Rosneft x CNPC Crude oil 15 mt x 20 yrs
2015 2009 2019 2016 2017
NOVATEK x Silk Road Fund Yamal LNG 9.9% SIBUR x Sinopec SIBUR 10% NOVATEK x CNOOC CNODC Arctic LNG 2 20%
28 248 464 559 637 708 106 234 296 336 369 100 200 300 400 500 600 700 800 2000 2017 2025 2030 2035 2040 Demand, bcm Net imports, bcm Source: IEA World Energy Outlook 2018
2018-2040
Even if at a slower pace, energy consumption in China is expected to grow up to 2040; China is planning to use gas as an alternative to more polluting options (coal, biomass, and oil), and increasingly relies on imports to meet its demand; In 2018, China became the second largest LNG importer. Beijing has certain energy security concerns about shipping routes and the existing chokepoints; ‘Double Helix’: China is ready to rely on long-term contracts to ensure the uninterrupted energy
to oil and gas fields and acquiring shares in companies around the world; Russia’s contribution to the changing dynamics of China’s energy security is supposed to increase in the coming decades.