Power of Siberia’s natural gas pipeline plant in Heihe, Heilongjiang province, China, Tuesday, March 21, 2023.
Bloomberg | Getty Images
Russian President Vladimir Putin arrived in Beijing on Wednesday to meet with Chinese leader Xi Jinping, with a long-stalled natural gas pipeline on the agenda, as the war in Iran disrupts energy supplies.
Kremlin foreign policy aide Yuri Ushakov said Tuesday that the project “will be discussed in detail among the leaders.”
The planned 2,600 kilometer pipeline will carry 50 billion cubic meters per year from the Yamal region of Russia to China via Mongolia. Moscow and Beijing signed a legally binding memorandum to resume construction by September 2025, but pricing, financing terms, and a delivery timeline remain unresolved.
China is reportedly seeking price terms for the new pipeline to match Russia’s domestic average of $120-130 per thousand cubic meters, while Moscow is seeking terms closer to Power of Siberia 1, which analysts estimate will be more than double that amount.
China has been Moscow’s biggest energy buyer, with Russian oil imports jumping 35% year-on-year in the first quarter, according to official tax data.
The proposed additional pipeline would complement the existing Power of Siberia 1 project, which brings about 38 billion cubic meters of gas to China annually, and both countries agreed to further expand their annual capacity.
The Power of Siberia 1 project has delivered an estimated 38 billion cubic meters of gas to China by 2025 and both countries have agreed to increase their annual capacity further.
CNBC
The US-Iran war that began in late February effectively led to the closure of the Strait of Hormuz, disrupting half of China’s oil imports and nearly a third of its LNG supply.
While that energy shock creates new incentives for Beijing to consider another above-ground pipeline that bypasses the submarines entirely, analysts remain skeptical that it will change the calculus of Beijing’s negotiations.
China holds about 1.23 billion barrels of crude onshore — enough for about 92 days of refining needs, according to Kpler senior oil analyst Muyu Xu. Its domestic gas production also rose 2.7% in the first four months of the year, with central Asian pipelines, excluding the Russian system, providing more supply.
In this photo released by the Russian government agency Sputnik, Russian President Vladimir Putin (L) and Chinese President Xi Jinping walk together during a welcoming ceremony at the Great Hall of the People in Beijing on May 20, 2026.
Alexander Kazakov Afp | Getty Images
Russia’s gas exports to Europe have fallen from 2022 and hit Ukraine, with energy giant Gazprom seeing exports drop 44% last year to their lowest level in decades.
The power of Siberia 2, given its scale, could leave Moscow exposed to the risk of a single customer, while Beijing would trade Hormuz in maritime danger to depend on the power controlled by Russia, said Michael Feller, chief strategist of Geopolitical Strategy.
“The agreement will reflect not only mutual trust, but a decision that co-dependence is safer than others,” Feller added. “For the rest of the world, it will make Sino-Russian relations difficult to shake off.”
