NEWS ANALYSIS: Putin Uses Foreign Travel To Seek Markets for Gas
- By Sebastian Alison
- Jul. 19 2000 00:00
Like any other head of state, President Vladimir Putin becomes part salesman when he travels abroad officially, and on this week's visit to China he will try, among other things, to sell gas.
Lots of gas, in fact. If planned exports ever reach the volumes the Kremlin wants, they will add some 40 percent to the nation's gas exports outside the Commonwealth of Independent States, which are already by far the largest in the world.
In a statement issued Monday, the Economic Development and Trade Ministry said the country is working on two separate projects, one to deliver 10 billion cubic meters per year to China and another 10 bcm across China to South Korea.
The second project aims to deliver a further 30 bcm per year to China from different gas fields.
This would add 50 bcm per year to Russian sales outside the CIS, which last year stood at about 127 bcm.
But it is not only with China that Moscow wants to build good relations based on gas. A look at Putin's hectic travel schedule since he became president in May, and even before, shows that gas has become a major element of foreign policy.
In April, he was in Belarus, a transit route for Russian gas to hard currency markets, and Ukraine, whose relations with Russia have been soured in recent years by its vast gas debt.
In May, he visited Uzbekistan, a gas producer, and Turkmenistan, where he signed a preliminary agreement with Turkmen President Saparmurat Niyazov to buy huge volumes of gas, rising to some 50 bcm per year within a few years.
If this deal goes ahead, it will allow Russia to sell Turkmen gas to Turkey through a new pipeline from Russia, thus making a margin on the gas and apparently foiling plans by Turkmenistan to build a pipeline of its own to Turkey.
Then on Putin went, the same month, to Italy f which buys a third of its gas from Russia and some of whose largest firms are building the pipeline through which Russia may move Turkmen gas to Turkey. No surprise that gas was on the agenda there.
In June, after a trip to Spain, Putin carried on to Germany, Russia's largest gas customer, where among others he met gas industry officials.
Then home via Moldova, where one of the few really important issues in bilateral relations is its massive gas debt, as pressing as Ukraine's.
Putin has hardly put a step abroad except in countries where gas is an element in foreign policy. Even Japan, where he travels later this month, is eyed as a possible customer, via an extension to the proposed China pipelines.
"The business is now so big and important for the country's foreign trade earnings that gas is a large element of the foreign trade and foreign policy agenda," said analyst Jonathan Stern of London's Royal Institute for International Affairs.
"It's indicative of how political this business is now that a company needs the country's president to actually go in to speak for it with the other government," he added.
Putin's newly found interest in gas also highlights the country's dependence on raw materials.