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Mongolia seeks to re-route Russia-China gas pipeline

03rd July 2012

Mongolia wants to a Russian and Chinese pipeline to cross through its territory so it can switch to gas heating

Mongolia wants to re-route a pipleine to switch to gas heating in the capital

Mongolia is calling upon China and Russia to re-direct a planned natural-gas pipeline across its territory as the world’s fastest growing economy seeks to tap the cleaner-burning fuel, according to reports.

Altering the route to pass through Mongolia would save 1,000 kilometers of pipeline, Mongolian President Tsakhia Elbegdorj said in an interview in Ulan Bator, the nation’s capital.

It would also allow Mongolia to switch to gas heating in the capital, which ranks among the world’s most polluted cities due to widespread use of coal-fired stoves, Bloomberg reported. 

“This is economically beneficial,” Elbegdorj said. “We are trying to persuade our two neighbors not to exclude us from that project. The Chinese side has already agreed to discuss this and also the Russian side.”

Russia has discussed a gas pipeline to China, the world’s biggest energy user, for almost a decade without reaching a final agreement. Mongolia, squeezed between Russia and China, is struggling to end power shortages that threaten to hold back the development of the country’s resources industry, which helped its economy grow 17.3 percent last year.

Rio Tinto Group (RIO), the biggest foreign investor in Mongolia, is due to begin importing power from China this year to help run its USD 7 billion copper and gold mine in southern Mongolia when it begins. Western Mongolia runs entirely on electricity imports from Russia, according to a March report by London-based Oxford Business Group.

OAO Gazprom, the world’s biggest gas company, has yet to agree with state-run China National Petroleum Corp. on the starting price of supplies, according to Alexander Medvedev, deputy chief executive officer of the Moscow-based gas producer.

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