Russia revives Power of Siberia 2 talks

Vladimir Putin and Xi Jinping revived talks this week on the long-delayed Power of Siberia 2 gas pipeline, putting a stalled Russia-China energy project back on the agenda without announcing a final deal. The Kremlin said on May 20 that Moscow and Beijing had reached a “general understanding” on the pipeline, but left pricing, financing and timing unresolved. The project would send Russian gas to China through Mongolia from fields that once served Europe. The renewed discussion comes as Russia continues to redirect energy exports toward Asia after Western sanctions and the collapse of much of its European gas trade. ### What exactly did Moscow say after the Putin-Xi meeting? Dmitry Peskov, the Kremlin spokesman, said on May 20 that Russia and China had a general understanding on Power of Siberia 2, but that “key details” and a timetable still had to be agreed. Reuters reported that the Kremlin did not provide a target date for construction or first gas flows. (msn.com) Wednesday’s statement stopped short of a binding construction announcement. Reports around the summit said pricing, financing terms and delivery timing remained open issues between Moscow and Beijing. ### How big is the pipeline Russia wants to build? The planned Power of Siberia 2 system is described in multiple reports as a 2,600-km route with capacity of 50 billion cubic meters of gas a year. (msn.com) The line would carry gas from Russia’s northern and western Siberian resource base to China through Mongolia. (cnbc.com) Gazprom’s Mongolian transit section is known as Soyuz Vostok. Gazprom said in January 2022 that the feasibility study for Soyuz Vostok envisaged a 962.9-km pipeline across Mongolia with five compressor stations and 1,400-millimeter pipe. ### Why has this project taken so long? Russia and China have discussed Power of Siberia 2 for years, but commercial terms have repeatedly delayed a final agreement. (pgjonline.com) Recent reporting said differences over price, financing and the timetable were still blocking a full deal during Putin’s latest trip. (gazprom.com) China’s position has mattered because it has alternatives. Al Jazeera reported that analysts see Beijing using its market leverage to seek favorable terms while diversifying supply sources. ### How does it fit with Russia’s existing gas trade with China? (cnbc.com) Russia already ships pipeline gas to China through the original Power of Siberia link. DieselNet, citing Gazprom data from last year’s later agreement coverage, said Russia exported 31.12 bcm through that route in 2024 and reached the contractual annualized level of 38 bcm on daily deliveries in December 2024. (aljazeera.com) The second line would differ from the first by drawing on gas reserves tied to western Siberian fields that historically supplied Europe. The Institute of Energy Economics, Japan said that would create a new export outlet for gas previously linked to the European market. ### Why does Mongolia matter in the negotiations? (dieselnet.com) Mongolia sits on the transit route for the proposed line, and the section across its territory has been prepared under the Soyuz Vostok name. Gazprom said the Mongolian feasibility study was completed in 2022, laying out the route and technical specifications for the transit segment. (eneken.ieej.or.jp) That means the project is not starting from scratch on paper, even if the commercial deal is unfinished. Pipeline Journal reported this week that the route through Mongolia remains central to the revived discussions between Russia and China. ### What happens next after this week’s talks? (gazprom.com) May 20 ended with no public final investment decision, no published gas price and no construction timetable. Peskov said the next step is for the remaining terms to be worked out between the parties, while reports identified Gazprom and China National Petroleum Corp. as the companies still expected to settle the commercial framework. (msn.com) (pgjonline.com)