Russia and China sign a memorandum for a new pipeline, Power of Siberia 2, a project that could reshape global energy flows but still lacks key details.
Russia and China agree on a new pipeline
Russia and China have signed a memorandum of understanding for a new pipeline, the Power of Siberia 2. The project, long delayed by Beijing’s hesitation, could become one of the world’s most expensive pipelines and reshape global energy flows if built.
For Russian president Vladimir Putin, the deal is a geopolitical win and a direct signal to Trump, who had sought to drive China away from Moscow. For Chinese president Xi Jinping, who holds stronger bargaining power, the move demonstrates that Beijing, when pressed by the United States, can turn to Russia. Xi is likely expecting preferential pricing on gas supplies.
Moscow announced the memorandum following Tuesday’s bilateral meeting in Beijing during the Shanghai Cooperation Organization summit. Gazprom said the parties had signed a binding agreement, while Chinese media only mentioned the signing of about 20 cooperation documents, including in energy. According to Gazprom CEO Alexei Miller, the agreement would last 30 years.
Meanwhile, Moscow and Beijing finalized commercial deals to increase gas deliveries by 6 billion cubic meters, aiming to reach 56 bcm annually through existing routes before construction of the new pipeline, Miller said.
Power of Siberia 2
The construction of Power of Siberia 2 is expected after 2030, with a capacity of 50 bcm per year. The pipeline would run eastward through Mongolia, sourcing from the same gas fields that supplied Europe before Russia’s invasion of Ukraine. For China, it provides an alternative to liquefied natural gas imports from the United States, Qatar, and Australia.
The project could alter the outlook for companies considering new LNG export terminals, especially in the U.S., said Anne-Sophie Corbeau, researcher at Columbia University’s Center on Global Energy Policy, in comments to the Financial Times.
For Russia, the agreement is vital to offset the loss of European sales as Gazprom struggles to stay afloat. The European Commission has already proposed ending imports of Russian gas and oil by 2027. Until now, China had been cautious, constrained by weaker gas demand and concerns over excessive reliance on a single supplier.
More questions than answers
The memorandum is not a final contract, and Miller’s statements leave key uncertainties. The price of gas supply remains undefined, a critical element in calculating construction costs and how they will be shared. It is also unclear whether Beijing will purchase flexible volumes or if the new pipeline will operate at full capacity. Moreover, no detailed timeline has been set for construction or delivery.
