Chapter V. The implications of the energy relations between Russia, China and Japan
Picture 9. Nuclear power reaction in China
6. Tianwan 1&2 nuclear stations
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barrels of oil per day 218, about one third of Russia‘s current exports. Russia began commercial oil deliveries through the new pipeline to China on January 2011 consolidating increasingly close energy ties with China. Under this deal China lent Russia 25 billion USD in 2009 to help fund the project and pledged to import 300,000 barrels per day through the new pipeline for 20 years.
Rosneft, Russia‘s state oil company has been supplying about 300,000 barrels per day of oil to China by rail, but the new pipeline will streamline supplies providing a direct link between new oilfields in east Siberia and the Chinese frontier on the River Amur.
5. Exporting Sakhalin off-shore gas to China and exporting liquid natural gas to South China
Offshore reserves of Russia's easternmost major island now total 14 billion barrels of oil or just over 1 percent of global reserves and 96 trillion cubic feet of gas. In 2004 terms, this is the equivalent of four years of United States oil imports. It would yield about 28 years of American gas imports. But the main part of foreign companies participating development and exporting of resources are Shell, The Exxon and British Petroleum. But China also managed to participate after President Hu Jintao‘s visit to Moscow in July 2005.
Rosneft and China's leading oil company Sinopec had set up a joint venture to explore oil and natural gas under the Sakhalin-3 project. It became China's first energy project in Russia. Sinopec, Asia's biggest refiner, has 25,1 percent in the project.
Both countries started drilling works, but then in September 2010 Sinopec Group, or China Petrochemical Corp, has withdrawn all engineering technicians because findings were not satisfactory, the 21 Century Business Herald reported, without identifying a source of the information. The parent of Sinopec Corporation in 2006 teamed up with Russia‘s Rosneft to tap the 5,300 square kilometers Veninsk exploration block with water depth ranging from 25 to 150 meters, marking China‘s first foray into Russia‘s oil and gas sector.Sinopec‘s spokesperson, Huang Wensheng, was not immediately available for comment, while a Rosneft official in Beijing said he was not aware of the development 219.
6. Tianwan 1&2 nuclear stations
On 30 December 1997, China and Russia signed a contract to jointly build the Tianwan Nuclear Power Plant. The original cost of the project was estimated at 2,5 billion
218 China Daily, “China- Russia Pipeline Pact Boosts Energy Links”. Retrieved February 25, 2011 from http://www.chinadaily.com.cn/china/2008-10/30/content_7156881.htm.
219 Offshore Energy, “Russia: Sinopec Abandons Sakhalin – 3 Project‖. Retrieved. September 30, 2010 from http://www.offshoreenergytoday.com/russia-sinopec-abandons-sakhalin-3-project.
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USD, but has now reached over 3,2 billion USD. The signatories of the contract were AO Atomenergoeksport (AEE) and VPO Zarubezhatomenergostroy (ZAES) of Russia and Tianwan Nuclear Power Corporation of China. The first phase installed two Russian VVER-91 (an evolutionary advanced version of the VVER-1000) pressurized water reactors. Construction plans include a second phase (units 3 & 4). On 24 September 2003, a Russian Atomic Energy Ministry spokesperson stated Russia is ready to assist the next phase of the Tianwan Nuclear Power Facility. He stated, ―If decides to build the second stage of the nuclear power plant, Russia is ready to take part in this project‖220.
When construction began on 25 April 1998, Chinese authorities began looking for a nearby site that could house 400 Russian specialists who will install the equipment.
According to a spokesman for the Russian AtomExport, ―It is obvious that the construction of the Tianwan Nuclear Power Station will promote the fulfilment of the agreements between the heads of our states on bringing Russian-Chinese trade turnover to 20 billion USD at the turn of the century‖221. In January 1999, Russian and Chinese officials signed a new protocol which, for the first time, outlined the schedule for the start of construction of the two reactors at Tianwan. Contracts on design and commercial aspects of the project were completed in 1997. Construction on Unit-1 began on 20 October 1999, and Unit-2 in 2000 222 . The Tianwan Nuclear Power Plant adopted advanced equipment-control system imported from Siemens, Germany. Russia was responsible for project design, equipment supply, installation and calibration, and personnel training. China was responsible for engineering construction. The two nuclear power generators would be operated by the Jiangsu Nuclear Power Co. Ltd., set up jointly by the China Nuclear Power Industry Corp., Jiangsu Power Co., Jiangsu International Trust & Investment Co. and the China Huadong Power Group.
The initial nuclear fuel for the Tianwan facility is provided by TVEL's plant in Novosibirsk. A TVEL spokesman said the nuclear fuel rods were be stored at the TVEL plant until delivery to the Tianwan nuclear plant. "In accordance with existing agreements, this nuclear fuel will be supplied to the Tianwan nuclear power plant six months before its first reactor goes on line," the spokesperson said. Future nuclear fuel would be produced by China, which purchased a production license from the Russian Atomic Energy Ministry.
220 Nuclear Threat Initiative, ―Tianwan 1&2‖ . Retrieved April 4, 2011 from http://www.nti.org/db/china/jiangsu.htm.
221 Ibid.
222 Ibid.
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Tianwan-1 is expected to be connected to the power grid in May 2004, enter commercial operation in December 2005, Tianwan-2 started commercial operations in August 2007.
The project is the biggest nuclear project between the two countries. Jiangsu Nuclear China Nuclear Energy Industry Corporation (Beijing) and Russia's Atomstroyexport (Moscow) officially signed the Engineering Contract for the Phase II Expansion of the Tianwan Nuclear Power Station on September 27, 2010 223.This cooperation of China and Russia for the units 3 and 4 expansion project at the station has entered into an advanced stage.
In November 2007, China and Russia had reached an agreement for the Phase II expansion of the Tianwan Nuclear Power Station. On March 23, 2010 China and Russia officially signed the framework cooperation contract for the expansion. After that, both parties carried out three rounds of contractual negotiation regarding the engineering contract for the expansion project. China and Russia reached agreements for project areas such as the scope of responsibility, interface management, the timetable for the delivery of design documents, personnel arrangement regarding technical design, a preliminary safety analysis report, the first batch of construction drawings, and the price and payment schedule. As the supplier, Atomstroyexport will be responsible for the engineering of the nuclear islands for units 3 and 4, as well as the associated joint design work within its scope of responsibility.
Atomstroyexport will provide the technical design documents and associated services to the buyer. The engineering for units 3 and 4 will be made based on the engineering units 1 and 2, but will include improvements to meet the requirement of design specifications.
From the analysis of the above mention projects it is obvious that both countries have tremendous perspectives for cooperation, but theirs results demonstrate there are obstacles, which prevents some of these plans to be implemented.
3.3 Problems and perspectives of Russo-Chinese Energy Cooperation
As a result of recent developments Russia became China‘s fourth largest energy provider, providing approximately 9 percent of Chinese imports. A doubling of this percentage may occur over the next decade, especially if Russian gas comes online in China.
But, firstly, the countries will have to find ways to solve existent problems which constrain current energy cooperation. These problems are conditioned by the following factors.
223 China Post, “Russia to Build Two More Reactors in China‟s Tianwan‟s Nuclear Plant‖. Retrieved March 26, 2011 from http://www.chinapost.com.tw/china/national-news/2010/03/26/249954/Russia-to.htm.
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1) Changes in the structure of international energy market and position of