Russia’s Gazprom PJSC said it signed a legally binding agreement to build the long-anticipated Power of Siberia 2 gas pipeline to China via Mongolia and would expand deliveries through other routes, in what will be seen by the Kremlin as a major political win.
In comments made to Russian wires from Beijing, Chief Executive Officer Alexey Miller said the gas producer could ship as much as 50 billion cubic meters a year via the Power of Siberia 2 for 30 years. Miller said the price for the fuel will be lower than what Gazprom currently charges customers in Europe, according to the reports.
Beijing has yet to confirm the detail of Miller’s pronouncement. China’s state-owned Xinhua News Agency, reporting on bilateral meetings, did not specifically mention the pipeline, though it reported that the two countries signed more than 20 cooperation agreements, including in the field of energy.
Discussions around the mega-project have been stalled for years. While Russia has been eager to advance it in order to compensate for lower European deliveries following the invasion in Ukraine — and the European Union is now considering an outright ban by the end of 2027 — China has been far more cautious. Gas demand growth has been slowing and Beijing is wary of excessive dependence on a single supplier.
Securing any advance in the project would be a diplomatic coup for President Vladimir Putin and a powerful signal of the strong ties that have developed with China since 2022, as Russia grapples with the impact of Western sanctions. The past few days’ meeting of the Shanghai Cooperation Organization security bloc comes at a moment when the Trump administration is dialing up its rhetoric and slapping punitive tariffs on nations around the world.
Miller’s comments to Russian newswires leave several questions unanswered, however. In addition to unfinished price negotiations, it isn’t clear whether China can purchase flexible volumes from the pipeline or if it will have to buy its full capacity. In addition, no timeline was given for construction or for the start of deliveries. Financial details are also yet to be disclosed.
“The project to build Power of Siberia 2 and the Soyuz-Vostok gas pipeline, the transit link through Mongolia, as well as the gas shipment capacity in China, is going to become the largest, the most massive and capital-intensive gas project in the world,” Miller was quoted as saying by Russian news wires.
Gazprom has also agreed to raise flows to China via the existing Power of Siberia route by another 6 billion cubic meters a year, according to the reports. Its current annual capacity is 38 billion cubic meters.
