While the world is distracted by escalating tensions in Ukraine, Russian President Vladimir Putin announced plans to create an “energy association” of developing countries.
World Nuclear News reports that Putin is looking to form an energy coalition, complete with its own “fuel reserve bank and an energy policy institute,” among BRICS nations. BRICS countries include the world’s major developing economies of Brazil, Russia, India, China and South Africa.
The energy alliance would seek greater cooperation between BRICS, including nuclear power agreements.The announcement comes after BRICS agreed to form a New Development Bank to act as an alternative to the World Bank and International Monetary Fund.
“These steps would allow us to strengthen our nations’ energy security and prepare us for the creation of new instruments and new institutes to trade energy resources,” Putin announced at the 6th annual BRICS meeting in Brazil.
“It would be possible to create a fuel reserve bank and an institute of BRICS energy policy under its auspices. These steps would allow strengthening energy security of our countries,” Putin added.
In the wake of the unrest in Ukraine, Russia has been looking to expand its energy influence outside of Europe as the continent looks for ways to wean itself off of Russian oil and gas. Putin recently sealed a natural gas pipeline deal with China, where the growing economy is hungry for for more energy.
Russia has also been increasingly looking to strengthen its energy ties with South America. Prior to the announcement, Russia had already “signed a number of nuclear power cooperation agreements,” reports Nuclear World News.
The Russian state-owned nuclear company Rosatom signed agreements with Argentina and Brazil earlier this month for construction of nuclear power plants, generators and storage facilities in South America.
Putin himself has already held talks with Indian Prime Minister Narendra Modi on expanding the two countries’ energy and defense partnerships. India is also negotiating with Russia on extending an international natural gas pipeline as well.
Russia’s expansion of natural gas pipelines to Asia have some market analysts and lawmakers worried that the U.S. may miss out on the opportunity to ship its own natural gas to potential east Asian customers.
“Competition in the international gas markets is bound to heat up, and the United States may have already missed its opportunity for an LNG [liquid natural gas] export bonanza,” writes Richard Martin of Navigant Resources for Forbes magazine. “Expanding pipelines, more export terminals, and better technology for liquefying and shipping natural gas will all help globalize the natural market, in the way the crude oil market is already globalized.”
“Already, the relatively low price that China will pay for Russian gas (around $350 per thousand cubic meters, analysts estimate) is putting downward pressure on higher prices for Japan and South Korea,” Martin added.
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