China Has Not Confirmed Putin's Statements About The Agreement On The Power Of Siberia-2 Gas Pipeline
3- 4.09.2025, 10:21
- 4,528
Russia's statements about the pipeline were "somewhat premature."
Statements by Gazprom and Russian President Vladimir Putin that an agreement has been reached with China on the construction of a new gas pipeline, Power of Siberia-2, remained unconfirmed by the Chinese side.
The fact that the pipeline, which has been under discussion for almost 20 years, will finally be built was announced Tuesday by Gazprom head Alexei Miller. According to him, a "legally binding memorandum" was signed during Putin's visit to China. And taking into account the existing pipes, the volume of gas supplies will rise to 106 billion cubic meters a year.
On Wednesday, Miller's statements were echoed by Putin. "Finally, the negotiating parties have found a consensus," he said, wrapping up the visit. "Still, Gazprom is one of our leading companies. It has new markets emerging, expanding. In general, this here through Mongolia we will have 50 billion (cubic meters). <�...> In total, we will get more than 100 billion cubic meters of gas," Putin said.
The Washington Post. China's CNPC, Gazprom's gas buyer, has said nothing about the pipeline.
Chinese state media also wrote nothing about the gas deal, the Financial Times noted. An official communique following talks between Xi, Putin and Mongolian President Ukhnaagyin Khurelsukh said only that the three countries "should actively promote cross-border infrastructure and energy projects." "Power of Siberia-2" is not mentioned.
Russia's announcement of the pipeline was "somewhat premature," notes Victor Gao, chairman of the China Energy Security Institute, "It is more of a (signal of) intent than a concluded agreement."
"A legally binding memorandum without a price and terms is not a final agreement," agrees Alexander Gabuev, director of the Carnegie Russia Eurasia Center.
"The real deal," he says, was an agreement to pump more gas through the existing pipes - Power of Siberia-1 (an additional 6 billion cubic meters) and the Far Eastern route (2 billion). As for Power of Siberia-2, China has signaled "yes, we are interested, we accept the route through Mongolia - but let's talk about price and conditions," Gabuev explained to the FT.
Price remains a stumbling block for Power of Siberia-2, which will stretch 2,600 kilometers from the Yamal Peninsula to the northern part of China. Alexei Gromov, chief director of the energy sector at the Institute of Energy and Finance, reminds that China used to demand that gas should cost the same as in Russia - $120-130 per thousand cubic meters (taking into account the planned indexation). And this is 3.2 times lower than the current prices in Europe ($390 per thousand cubic meters). Now, according to the Ministry of Economic Development, Gazprom pumps gas to China at $247 - that is, at a 36% discount to European quotations.
Depending on financial conditions, the project could become unprofitable for Russia, but China has all the leverage in these negotiations, since Moscow has cut itself off from Europe, and it has no other markets, notes Joseph Webster of the Atlantic Council.
"But it will be a major diplomatic victory if they can reach a deal, because it will allow Putin to demonstrate both to external audiences - especially in Europe - and domestically - perhaps even more importantly - that he has international support and that he has the backing of the second most powerful country in the world," Webster adds.
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