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Kandy Wong

China and Russia’s negotiations regarding the construction of the Power of Siberia 2 pipeline have stalled, according to multiple sources who have knowledge of the issue, as both sides cannot bridge a big gap over gas price expectations.
“China hopes to secure a price comparable to Russia’s subsidised residential rate, around US$50/thousand cubic metres, or at least the domestic industrial rate of about US$120-130/thousand cubic metres,” said one source, who asked for anonymity due to the sensitivity of the issue.
But Russia has a different expectation, as it wants to reference the price of the existing Power of Siberia 1 pipeline, which is about US$250-260/thousand cubic metres, the source added.
China’s current average gas import price via Power of Siberia 1 is about US$258/thousand cubic metres, the source noted, while Russia’s selling price to Europe before the Ukraine war was over US$420/thousand cubic metres.
“It seems to me that Gazprom and CNPC (China National Petroleum Corporation) are preparing to begin supplying Russian gas to China via the Far East route and are discussing projects to expand and increase supplies along this route,” said a second source, who also asked to remain anonymous.
“The same is happening with the Power of Siberia 1 – we see that they are also working to increase physical supplies.”
The planned 2,600km (1,553 miles) Power of Siberia 2 pipeline is expected to carry 50 billion cubic metres of gas per year ‌to ⁠China via Mongolia from the Arctic gas fields of Yamal, which is also assumed to serve as a complement to Power of Siberia 1 or the China-Russia Far East Gas Pipeline.
Sources confirmed that both sides had halted the decades-long negotiations for Power of Siberia 2 due to “no progress on price”. The first memorandum on the project was signed back in 2006.
Russian energy minister Sergei Tsivilev announced during the Eastern Economic Forum in early September that Russian President Vladimir Putin had renamed the pipeline to “Power of Baikal”, without further explanation.


China’s customs database only showed China’s monthly import volume of Russian natural gas through pipelines up to 2021. Last year, China’s import value of Russian pipeline gas rose 17.2 per cent year on year to US$9.4 billion, customs data showed.
Russia’s deputy prime minister, Alexander Novak, said that Russia planned to deliver 50 billion cubic metres of natural gas to China in 2026, up from 38 billion cubic metres in 2025.
Chinese President Xi Jinping and Putin were expected to discuss the Power of Siberia 2 project in a meeting in Bishkek, the capital of Kyrgyzstan, for the Shanghai Cooperation Organisation (SCO) Summit, held between August 31 and September 1. However, the official readout did not mention such discussions.
The announcement of Russia’s renaming of Power of Siberia 2, after the SCO Summit and during the Eastern Economic Forum, was “mostly a PR move for the domestic audience, which was pre-coordinated with both Beijing and Ulaanbaatar”, said Munkhnaran Bayarlkhagva, a former official at the National Security Council of Mongolia.
The way Mongolia’s new prime minister, Uchral Nyam-Osor, framed the country’s intent regarding the Power of Siberia 2 pipeline as “potentially serving the principles of mutual benefit”, added Bayarlkhagva, implied that the previous articulation of Soyuz-Vostok – the connecting part of the pipeline in Mongolia – did not fully serve its interests.
“In other words, Ulaanbaatar did not want to commit to ‘the Power of Siberia 2 [or] Soyuz-Vostok configurations’,” he explained.
Aleksei Chigadaev, associate fellow at New Eurasian Strategies Centre, noted that China’s negotiating position was “becoming stronger by the day”, and there was little reason for Beijing to rush a decision over the construction of Power of Siberia 2.
“The US factor should not be overlooked either,” added Chigadaev, pointing to the future meeting between Xi and US President Donald Trump. Both sides could discuss the impact on energy supplies through the Strait of Hormuz, which could become yet another factor shaping China’s negotiating strategy towards Russia.


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China-Russia relations

An employee checks a gas valve at the Atamanskaya compressor station, part of Gazprom’s Power of Siberia 1 gas pipeline outside the far eastern town of Svobodny, in Amur region, Russia. Photo: Reuters

Xi-Putin summit leaves gas pipeline plan in limbo

Russian President Vladimir Putin and Chinese President Xi Jinping. Photo: Pool/AP

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Illustration: Lau Ka-kuen

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Gazprom’s Chayanda oil and gas condensate field, one of the largest in eastern Russia, is a resource base for the Power of Siberia pipeline. Photo: Tass/Abaca Press/TNS

China-Russia pipeline would be ‘shock’ to global LNG trade: analysts

The Power of Siberia 2, a natural gas pipeline from Russia to China and passing through Mongolia, would have broad impact on the global energy trade if completed. Photo: AFP

Mongolia still expects new Russia-China gas pipeline to go ahead

Russian President Vladimir Putin and President Xi Jinping make a toast during a reception following their talks at the Kremlin in Moscow in March 2023. China and Russia are continuing to discuss a second gas pipeline. Photo: TNS

A worker inspects a liquefied natural gas facility in Tianjin, northern China. Russia is China’s third-largest supplier of LNG. Photo: Xinhua

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Moscow-Beijing negotiations over pipeline have halted as ‘no progress’ made on bridging a big gas price gap, sources say


Moscow-Beijing negotiations over pipeline have halted as ‘no progress’ made on bridging a big gas price gap, sources say.


Power of Siberia 2 pipeline talks stall over China-Russia price dispute: sources

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Moscow-Beijing negotiations over pipeline have halted as ‘no progress’ made on bridging a big gas price gap, sources say

Moscow-Beijing negotiations over pipeline have halted as ‘no progress’ made on bridging a big gas price gap, sources say