A day after Rosneft and Transneft secured a $25 billion loan with China in return for providing 20 years worth of oil from East Siberia, Russia has opened its first LNG plant, capable of providing five percent of world demand when running at full capacity–the first step in Russia’s ultimate goal of providing a quarter of the world’s LNG exports.
Besides its usefulness as a political weapon, the diversification of Russia’s energy industry is an economic goldmine: “the marriage of Russian natural resources with Asian financing and manufacturing prowess.” By 2030, one report suggests, Russia wants to account for 30 percent of Asia’s energy demands.
“I will not conceal that we are happy about this,” said Russian President Dmitry Medvedev, adding the plant would promote “Russia’s position as a global supplier of natural resources.”
It’s also a hedge against further fallout from the financial crisis. Further Asian energy concessions could offset Russia’s $117 billion debt to foreign banks. As reported by the International Herald Tribune, Chris Weafer, chief analyst for Uralsib bank in Moscow, published a research note Wednesday describing the Russian equity markets as “a highway along which asset valuations and investor sentiments are being driven by the infernal troika of oil, ruble and economy. All three of which have reached the banks of the river Styx and are scrambling to find the appropriate number of kopeks to pay the ferryman.”