So the sub-text headline is: Russia and China Spout Hot Gas
There are enough links across the web to........., no good analogy comes to mind, but you get my point. My early morning reading chucked up two from the FT; Russia pledges gas pipelines to China and a subscription only piece from an Executive Director (no less) at the International Energy Agency - Claude Mandil. The long and short of which say that Russia has pledged two pipelines originating in western Siberia that will terminate in China. I even believed that they would allow gas to go down them. I am sure that the Japanese are thrilled by this - but then they got Sakhalin's LNG and are less willing to make soft loans to purchase Yuganskneftegas.
Mandil's op ed piece says that the Chinese contracts will impact western Europe's energy security because Russia/GAZP (whoever) needs to invest $11bn annually after theft (actually he didn't say that) to supply enough gas to honor both its European and Chinese contracts/commitments. What worries me about the headline is Mandil's Euro-centric view that Europeans have a right to the gas - he is French after all; Russia must act to avert gas supply crisis. A GAZP spokesman refutes his statement but you need to have an attention span longer than 5 minutes to get there. Mandil's point about the need for investment (and competence) is correct if European's aren't to spend significantly more on their gas from Algeria; albeit that will also be supplied by GAZP.
The last two links are from the Russia Journal, which used to be a newspaper and is now a supplier of good headlines for a slightly more Russophile point of view. Russia to remain the world’s energy donor and relevantly China gas supplies to end Russia’s European dependence.
Russia and Russians are proud of VVP's energy policy which I would summarize as; if you want to be warm, its time to treat us like grown-ups.
The problem with his energy policy is the problem of many if not most Russian businesses; the theory is fine but the execution is flawed. GAZP and Rosneft are not companies, they are ministries with a license to enrich their managers and stakeholders. Grabbing assets from bankruptcy is a fantastic one-time wealth creation scheme, creating a world class company requires more than having long dinners with tall girls.
Of the many things you don't know about me is that 18 years ago I studied nuclear deterrence and Russian politics (along with colouring in the Dandy and Beano). Carrying a big stick and talking softly is a fine policy as long as you are willing to use the stick; and demonstrate that willingness from time-to-time. A policy that requires Russia to be the "world's energy donor" also requires it to be the world's energy industry leader. With all due respect to the native cunning of the 5th Directorate Thugs it's not their natural environment.
Russia has every right to dispense its natural resources as it sees fit and base its foreign policy around their distribution. It runs the risk of wearing the Emperor's new clothes if it does not invest in E&P assets and the infrastructure to get the gas to markets.