A Power of Siberia natural gas pipelines facility in Heihe, Heilongjiang province, China, on Tuesday, March 21, 2023.
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Russian President Vladimir Putin on Wednesday arrived in Beijing to meet Chinese leader Xi Jinping on Wednesday, with the long-stalled Power of Siberia 2 natural gas pipeline key to the agenda, as the Iran war disrupts energy supplies.
Kremlin foreign policy aide Yuri Ushakov said Tuesday that the project “will be discussed in great detail between the leaders.”
The planned 2,600-kilometer pipeline would carry 50 billion cubic meters of gas annually from Russia’s Yamal fields to China via Mongolia. Moscow and Beijing signed a legally binding memorandum to advance construction in September 2025, but pricing, financing terms, and a delivery timeline reportedly remain unresolved.
Price and other terms have stalled talks on the project. China reportedly wanted pricing terms for the new pipeline to match Russia’s domestic rate of around $120-130 per 1,000 cubic meters, while Moscow is seeking terms closer to Power of Siberia 1, which analysts estimate would more than double that figure.
China has been a major buyer of Moscow’s energy, with its imports of Russian oil jumping 35% year over year in the first quarter, according to official customs data.
The proposed additional pipeline would complement the existing Power of Siberia 1 system, which delivered approximately 38 billion cubic meters of gas to China last year, according to Reuters, and both countries agreed to expand its annual capacity further.
Power of Siberia 1 system delivered approximately 38 billion cubic meters of gas to China in 2025 and both countries agreed to expand its annual capacity further.
CNBC
The U.S.-Iran war that started late February has effectively led to a 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 fresh incentives for Beijing to consider an additional overland pipeline that bypasses maritime chokepoints entirely, analysts remain skeptical that it would alter Beijing’s negotiating calculus.
China holds around 1.23 billion barrels in onshore crude inventory — sufficient for roughly 92 days of refining needs, according to Kpler senior oil analyst Muyu Xu. Its domestic gas output also rose 2.7% in the first four months of the year, with central Asian pipelines, other than the Russian system, providing additional supply.
Russia’s gas exports to Europe have collapsed since its 2022 invasion of Ukraine, with state-owned energy giant Gazprom seeing shipments reportedly plunge 44% last year to their lowest level in decades.
Power of Siberia 2, given its scale, could leave Moscow dangerously exposed to a single customer, while Beijing would be trading Hormuz maritime vulnerability for dependence on Russian-controlled energy, said Michael Feller, chief strategist at Geopolitical Strategy.
“A deal would signal not just trust, but a decision that co-dependency is safer than the alternative,” Feller added. “For the rest of the world, it would make the Sino-Russian relationship harder to unpick.”
