A new mega project for gas transit to China is in the offing, as Russian President Vladimir Putin has approved Mongolian offer to construct a transit gas pipeline to China through its territory.

According to Mongolian President Khaltmaagin Battulga who made the announcement at the Eastern Economic Forum (EEF), the Chinese President Xi Jinping has equally accepted to study the mega project. Battulga said:

“Last year, I proposed creating a mechanism for coordinating activities to create an energy supernetwork in Northeast Asia. Over the past year, the Mongolian side completed the study of this issue and carried out a series of activities within our region.”

China-Russia-Mongolia Economic Corridor

In 2018, China, Russia, and Mongolia signed an agreement to initiate an economic corridor that would benefit all the three countries. According to information published on Jamestown.org, lack of a destination port has been one of the major obstacles in the construction of the proposed transit pipeline through Mongolia.

However, the negotiations with Russia have finally borne fruit. Mongolian government is under constant domestic pressure to use an alternative and cleaner energy, as nearly all its domestic energy output comes from coal. This has led to high levels of pollution especially in Mongolian capital Ulaanbaatar.

Taking Regional Cooperation to a New Level

The Economic Corridor is meant to be a mega project with a long-term contract that would result in greater volumes and lower tariffs. All the three countries—Russia, Mongolia, and China are expected to jointly finance the project.

“With the implementation of the program to create an economic corridor, we can take regional cooperation to a new level and give impetus to business development,” Battulga said.

For several years, Mongolia has offered its territory for the transport of Russian gas to China. Russia is currently the largest supplier of gas to China, transporting the product directly from Vladivostok, Blagoveshchensk, and Altai.