According to Russia’s Deputy Prime Minister, Alexander Novak, Russia is finalising the route of the Power of Siberia-2 gas pipeline that will run through Mongolia to China.
The pipeline would transport gas from the Yamal Peninsula reserves in West Siberia 2,600km to China, carrying 50 billion cubic metres of gas per year.
In the Energy Ministry’s in-house magazine, Novak wrote: “The decision for the Power of Siberia-2 gas pipeline’s route is at the final stage.”
Russia’s gas exports to some EU countries rose in July. Still, the Kremlin continues to look towards China, as ties with western Europe remain politically tenuous.
Last March, Russian President Vladimir Putin met with Chinese leader Xi Jinping in Moscow and Putin said that Russia, China and Mongolia had completed “all agreements” on finishing the pipeline. However, his comments were later transposed in a statement by the Kremlin.
China remains hesitant to fully commit to the Power of Siberia-2 gas pipeline. The country is not expected to need additional gas supplies until after 2030. Outside of existing deals with Russia, Beijing already has long-term contracts with the US and Qatar for liquefied natural gas (LNG) supplies.
Alexandra Prokopenko, visiting fellow at the German Council on Foreign Relations and former Russian Central Bank official, told Foreign Policy that “Russia needs China more than China needs Russia, and that’s the reality.”
She added that China is the one “who can dictate the price, who can dictate the conditions”.
According to Marina Shagina, a senior fellow at the International Institute for Strategic Studies, following the talks in March, China’s comments were “very vague, general statements without any concrete business proposals. That really shows a skewed picture of how asymmetry has evolved over time.” Beijing is yet to react to Novak’s announcement.