Assessing the congestion cost of gas pipeline between China and Russia

Abstract

Determining transportation routes is of great importance for advancing China-Russian gas cooperation, which has been hanging in the balance. This paper employs a general equilibrium model to assess the congestion cost of diversified gas transmission schemes between China and Russia on domestic long-distance pipelines, which addresses the inherent limitations of exclusively considering transport impacts in the decision-making process. Findings reveal a notable decrease in pipeline congestion incidents for the route integrated with the Shaan-Jing system, thus lending empirical credence to the feasibility of the proposed scenario involving Mongolia. In addition, key routes are defined in this paper based on congestion costs, which emphasize the challenges posed by bilateral gas cooperation to China's long-distance natural gas pipeline network, necessitating a strategic focus on critical pipelines as the top priority of pipeline optimization efforts in the future. This paper provides valuable insights into planning the second China-Russia gas pipeline and the decision-making process for the future development of long-distance pipeline infrastructure.