FX.co ★ Russia launches “Power of Siberia” pipeline

Russia has officially begun its gas supplies to China. On Monday, the massive gas pipeline “Power of Siberia” was launched by Russian President Vladimir Putin and his Chinese counterpart, Xi Jinping via a joint video conference. The pipeline launch is a significant event for the Russian gas company Gazprom. Over the past years, the company has not made any impressive gains or set up any profitable projects. Besides, Gazprom has lost several major cases at once in international courts. This time, the Russian gas company pins high hopes on the largest gas project in its history as the pipeline will allow Gazprom to significantly increase gas exports. Earlier, the Russian authorities have passed a bill abolishing state regulation of natural gas prices. Now, the gas price will be determined by market demand. It seems that this law was specially created to support the new gas pipeline. According to the new bill, the state tariffs will no longer apply to the pipelines launched after 2014, and the Power of Siberia is fully eligible. As a result, the final gas price for China will be lower, but Gazprom does not seem to give his fact any importance.