FSUOGM: Russia says Power of Siberia 2 deal with China will be signed "in near future"

Russia and China anticipate signing a contract “in the near future” on gas supplies via the planned Power of Siberia 2 pipeline, Russian Deputy Prime Minister Alexander Novak was quoted as saying by the Moscow-based Interfax news agency on May 16.

Novak’s comments come after Russian President Vladimir Putin travelled to Beijing on May 16 to meet with Chinese counterpart Xi Jinping. Ahead of the visit there was speculation that a deal would be signed on Power of Siberia 2, which would deliver 50bn cubic metres per year of gas from the Russian Arctic to China via Mongolia. However, while Novak was part of the Russian delegation in Beijing, Gazprom CEO Alexei Miller was not, and was instead on a business visit to Iran.

Russia first unveiled the Power of Siberia 2 project in 2019 and  since then has been engaging with China to secure a gas deal to support its construction of the 2,600-km pipeline. But Beijing has been reluctant to commit because of uncertainty about how much gas it will need in the future, and it is also aware that the longer it waits, the better a deal it is likely to receive. Russia has no other viable option to export gas from its large Arctic fields, which previously served the European market.

“We plan additionally to finish the review and sign a contract for the construction of a gas pipeline with a capacity of 50 bcm of gas through the territory of Mongolia in the near future,” Novak said.

The Russian and Chinese governments are also working on “other new projects,” he said.

China has been receiving gas from the first Power of Siberia pipeline since late 2019 and shipments are due to reach full capacity at 38 bcm per year by 2025. Chinese companies also have interests in Novatek’s Yamal LNG and Arctic LNG-2 terminals, and several other upstream ventures in Siberia.

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