Polar Silk Road for Natural Gas

China’s Polar Silk Road project has been attracting much attention. The project is set in the Arctic, where both Russia and the United States have military bases. Additionally, that is where one can find a rich supply of hydrocarbon.

China kicked off the project with Russia a year ago for shipping lanes. The Chinese President Xi Jinping claims they are opening up because of global warming-induced glacial melting.

The project comes in line with the “open polar theory,” which proposes that the polar seas could be exploited for commercial uses.

“To develop the Arctic, China will improve the capacity and capability in using applied Arctic Technology, strengthen technological innovation, environmental protection, resource utilization, and development of shipping routes in the Arctic, improve the living conditions of the people and strive for common development,” said China in its “Arctic Policy,” published in January of last year.

Meanwhile, this week has seen reports that China is starting to break into Arctic transport. They are acting through a joint venture between Cosco Shipping Holdings Co and Russia’s PAO Sovcomflot.

The joint venture will move natural gas from Siberia to Western and Asian markets.

This new project will most likely aid in shipping liquefied natural gas. Mainly shipping from central northern Siberia’s Yamal LNG to various destinations like Northern Europe, Japan, South Korea, and China.

Russia has been seeing months of gas-flooding toward the European markets. They have been keeping the gas prices low and therefore worsening a gas supply glut in the continent. The move has already helped it partially edge the US in the European market.

US Apprehensive of the Polar Silk Road icebreaker driving through ice in the Arctic for Polar Silk Road– Finance Brokerage

On the flipside, despite China’s stated goals of “technological innovation” and “environmental protection,” the United States is still wary of Beijing’s military ambitions.

According to the Pentagon’s annual report to Congress, the Asian country has “increased activities and engagement in the Arctic Region.”

China has had a record of deploying anti-ship cruise missiles and surface-to-air missiles in the South China Sea. This makes it possible for Beijing to have similar plans for the Arctic.

In 2011, China got a permanent observer seat at the Arctic Council. From there, it started building icebreakers after surpassing Canada and the United States.

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