Mongolia willing to help Putin ship gas to the East

Bold Javkhlan, Mongolia's finance minister

Mongolian finance minister Javkhlan Bold said it made no sense to shun Russia given Putin could work around the country – SeongJoon Cho/Bloomberg

Mongolia has signalled it is willing to help Russian President Vladimir Putin cement new gas supply routes to the East as international sanctions bite.

Javkhlan Bold, Mongolia’s finance minister, said policymakers hoped to capitalise on opportunities that would see more infrastructure running through the country as the Kremlin redirects its energy supplies towards Asian countries like China and India.

In an interview with the Telegraph, Mr Bold said he was hopeful that the so-called Power of Siberia 2 pipeline transporting gas between Russia and China through his country will make progress in the coming months, adding that it was important that Mongolia explored new partnerships going forward.

“Our end goal is to get some revenues for letting [the Power of Siberia 2 pipeline] pass through Mongolia and to some extent we can also become buyers,” he said.

Mongolia buys almost all its gas from Russia, and Mr Bold said the government stood ready to engage with Moscow and Beijing on future projects.

The original Power of Siberia gas pipeline runs directly into China through the country’s northern border with Russia.

Mr Bold said shunning further opportunities would not make economic sense, despite Mr Putin’s decision to invade Ukraine.

“[Russia] still has options if Mongolia says no to the gas transit opportunity. It has access to the Chinese market via Vladivostok for example. And therefore does it make sense to say no to this revenue opportunity?”

Mr Bold added: “We would be open to more opportunities because Russia has a back-up plan if we say no.”

Mongolia is heavily dependent on coal exports and is seeking to diversify its revenue streams as more countries – including China – set net zero goals.

A squeezed outpost of democracy between China and Russia, the country has tried to maintain a neutral stance throughout the war.

The landlocked country no longer imports goods from Ukraine that used to come through Russia, which has pushed up prices.

Mr Bold said he hoped to build stronger ties with Beijing in the years ahead, even though he described China’s recovery after it ditched its zero-Covid policies as disappointing.

However, he added that the country’s dependence on the world’s second largest economy had helped Mongolia to avoid a post pandemic “disaster”.

“If China’s borders remained closed and we had a war, we wouldn’t have imagined what disastrous effect that would have had,” he said.

Moscow has been pressing for a new Sino-Russian pipeline through Mongolia, though Chinese policymakers have been dragging their heels during talks to finalise the pipeline, a move that analysts say could help Beijing secure a lower price for gas as Mr Putin’s options continue to narrow.

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