Putin and Xi agree to speed up doubling of Power of Siberia pipeline

The Russia-China agreement to build the pipeline has stalled due to price demands

Russian Leader Vladimir Putin and Chinese Leader Xi Jinping have agreed to accelerate progress on the Power of Siberia 2 gas pipeline initiative, according to Deputy Premier Aleksandr Novak.

This development comes after top-level discussions held in Moscow during Xi’s official visit to commemorate Victory Day on May 9, marking 80 years since the Soviet Union's triumph over Nazi Germany.

The ambitious infrastructure project is designed to transport as much as 50 billion cubic meters of natural gas each year from northern Russia to China, passing through Mongolian territory.

Although some headway has been made, the project has faced postponements largely due to ongoing negotiations over pricing strategies and route planning.

“There were discussions, it is indeed an important project. A certain amount of work has already been done, including the feasibility study… The leaders gave instructions to expedite the process,” Novak stated.

Novak, a former Russian energy minister, emphasized that the groundwork is partially complete and both leaders have now directed their teams to hasten implementation.

Moscow views this venture as part of a broader strategy to broaden its energy export destinations, particularly in light of Western sanctions and diminishing demand from European markets.

For China, the pipeline represents a dependable source of energy to meet its growing consumption requirements.

At present, Russia supplies natural gas to China through the original Power of Siberia pipeline.

This is part of a USD400 billion deal signed in 2014 between Gazprom and China National Petroleum Corporation (CNPC).

Power of Siberia is the largest gas transportation system in eastern Russia. The first deliveries began in December 2019 under a contract between Gazprom and CNPC for a period of 30 years. The total value of the contract is $400 billion and the total supply will exceed 1 trillion cubic meters of gas.

The Power of Siberia pipeline has reached its maximum design capacity of 38 billion cubic meters of gas per year as of Dec. 1, 2024, one month ahead of schedule.