India – China – Russia Pipeline Project
A possible joint venture with India and Russia to develop a Siberian liquefied natural gas (LNG) and oil fields. It could also lead to a strategic access to its Arctic assets and its northern sea route. It is currently in its early stage of meetings but also the issue of uninterrupted supply lines has not been discussed yet. It is possible with the agreement that has been extended to China in the form of Eastern Siberia-Pacific Ocean Oil (ESPO) pipeline it could sweetened the deal.
India currently import about 80% of its oil, currently with the volatility of the market due to international crisis like Iran led by the U.S sanctions. The rising crude price has been felt strongly on India. Currently India cannot access Iran’s production in fears of being sanctioned by the U.S., it is making India into a vulnerable position. Seeking other supplies to fulfill their demands, looking elsewhere from other than OPEC could help Russia to step in as long as they trade in their own currencies not the US Dollars.
They could also trade with other items such as food, pharmaceuticals and leather products. It could be a win-win situation for the both countries. Russia can become a contender but only one problem looms over it is the geographic connection between both countries. Since India oil supplies comes from tankers a new option could emerge in a form of a pipeline to connect both countries.
It could also provide uninterrupted supply to India and China, China can become the catalyst because they are currently importing 1.3 million bpd crude via pipeline from Russia.
Geographically China is the link between both countries. The ESPO project has been a dedicated pipeline network that has made Russia oil indispensable to China.
If the 4,857 km ESPO pipeline can be extended to India the three Asian power countries may be bound in a strategic resource sharing agreement that will strengthen their relations. It could be beneficial to India strategic investment that includes a 15% stake in Vankorneft assets in Siberia.
The power of Siberia LNG pipeline aka Yakutia-Khabarovsk-Vladivostok LNG pipeline runs almost parallel to the ESPO can also be extended to India as part of the partnership. It could give the possibility for Russia to expect over 20 billion of incremental oil revenue by selling to India oil and LNG.
China could benefit as well by adding a transit fee usage of its territory under the partnership. If the project comes to fruition India could benefit from it by using domestic currency versus the volatile Dollar.