FSUOGM: Power of Siberia 2 talks reportedly in deadlock over Beijing's demands on prices, supply volumes

Negotiations between China and Russia on developing a second Power of Siberia gas pipeline are in deadlock because Beijing is making demands on price and supply levels that Moscow views as unreasonable, sources told the Financial Times on June 2.

Russia first unveiled the Power of Siberia 2 project in 2019, but is yet to clinch a gas supply contract with China to underpin its construction. Moscow envisages the pipeline carrying up to 50bn cubic metres per year of gas all the way from the Arctic to China through Mongolia.

According to the FT, China wants to pay close to Russia’s own domestic gas prices, which are heavily subsidised, and it will only commit to purchasing a small part of the planned 50 bcm per year. Russia’s government has said it expects to sign a deal “in the near future,” but sources told the FT that the deadlock in talks was the main reason why Gazprom CEO Alexei Miller had not participated in Russian President Vladimir Putin’s state visit to Beijing in mid-May.

If you’d like to read more about the key events shaping the former Soviet Union’s oil and gas sector then please click here for NewsBase’s FSU Oil and Gas Monitor.