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Jan 23, 2013 | 17:13 GMT

Russia's Growing Energy Ties with Asia

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Russia's Growing Energy Ties with Asia

Russia has long relied on Europe as its primary customer for energy exports, but over the past two years Moscow has worked to build out its energy infrastructure to the east as a way of diversifying its customer base. Currently, Russia has four export methods for sending its oil and natural gas east. The country uses its established rail lines to export from Russian oil fields to either the Pacific coast or Chinese border. In 2007, the Sakhalin oil project came online, allowing Russia to pump additional crude directly into its Pacific export routes. However, these two methods have only allowed Russia to export about 250,000 to 500,000 barrels of oil per day to Asian markets. More recently, Russia has finished work on major projects started in the early 2000s that greatly expanded its export capability. The Eastern Siberia-Pacific Ocean pipeline runs from Russia's West Siberian oil basin, located in central Siberia, some 4,800 kilometers (about 3,000 miles) east to the Pacific port of Kozmino. The first stage was completed in 2010, and a major expansion was finished at the end of 2012. A large spur off the pipeline called the Russia-China crude pipeline runs 964 kilometers directly south to the Daqing oil refineries in northeastern China. Altogether, these projects increased Russia's export capacity to Asia from 500,000 bpd via rail and Sakhalin to 2.1 million bpd with the two pipelines. Because oil and natural gas are the chief sources of revenue for the Russian government, the Kremlin wants to ensure it has the flexibility to shift routes and destinations as demand in different regions rises or falls, somewhat insulating the country from volatility in the energy markets.

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