Will Russia and China agree on Power of Siberia 2 gas pipeline terms?

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Russia Expresses Confidence in Reaching Power of Siberia 2 Deal with China

Russia maintains there is no doubt an agreement will be reached with China regarding the Power of Siberia 2 gas pipeline, despite reports of stalled negotiations. Kremlin spokesman Dmitry Peskov confirmed the political will from both Presidents Vladimir Putin and Xi Jinping to finalise the deal, with ongoing discussions on the commercial aspects. These commercial details are not intended for public disclosure, and Peskov noted that it is standard practice for nations to advocate for their respective interests during such negotiations.
Ongoing Negotiations Amidst Stalled Deal Reports

A recent Financial Times report indicated that the Power of Siberia 2 deal had encountered obstacles, primarily due to China's pricing demands. Specifically, China reportedly sought to secure gas at prices closely aligned with Russia's subsidised domestic rates. Furthermore, China's commitment to purchasing a significant portion of the pipeline's projected annual capacity of 50 billion cubic metres was reported to be minimal.
Commitment to Deepen Energy Dialogue

The commitment to advancing energy cooperation between Russia and China was reaffirmed when President Putin visited Beijing last month. During this visit, both leaders agreed to enhance their dialogue on energy matters. This intensified focus on energy dialogue underscores the strategic importance both nations place on their bilateral energy relationship, with Power of Siberia 2 being a key component of this future cooperation.
Historical Context of Pipeline Talks and Shifting Trade Dynamics

Discussions surrounding the Power of Siberia 2 project have been ongoing for approximately a decade, with pricing consistently emerging as a significant point of contention. This proposed pipeline is envisioned as a successor to the original Power of Siberia pipeline, which commenced gas supplies to China in late 2019 and is slated to achieve an annual capacity of 38 billion cubic metres by 2025. Concurrently, Russia has become China's leading oil supplier, a shift largely attributed to sanctions imposed on Russia over its actions in Ukraine, which have prompted Moscow to redirect its energy trade away from Europe.

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Will Russia and China agree on Power of Siberia 2 gas pipeline terms?

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