Power of Siberia 2
Proposed 50 billion cubic metre per year natural gas pipeline from Siberia to China via Mongolia, under negotiation since 2015.
Last refreshed: 26 May 2026 · Appears in 1 active topic
Ten years of deadlock then a 'parameters' deal: why is China still not signing with Russia?
- What is the Power of Siberia 2 pipeline and why has it taken so long to build?
- Power of Siberia 2 is a proposed 50 bcm/year gas pipeline from Siberia to China via Mongolia, roughly 2,600 km long. negotiations began around 2015 but have stalled repeatedly over price: Russia wants European-indexed rates, while China insists on discounts reflecting its alternative supply options, including Central Asian pipelines and LNG.
- Has Russia and China agreed on Power of Siberia 2?
- In May 2026 the Kremlin announced an 'understanding on the main parameters', but no contract was signed. Chinese state media declined to confirm the claim. Previous 'near-finalised' announcements between the two countries have dissolved into further negotiation, and analysts treated the May 2026 formulation with caution.Source: Lowdown reporting
- Why does Russia need Power of Siberia 2 so urgently now?
- Russia's oil and gas revenues fell 38% year-on-year in the first four months of 2026, and the Q1 budget deficit already exceeded the government's full-year target. With European gas markets closed by sanctions, China via Power of Siberia 2 is the only buyer of scale available for Siberian gas.Source: Russian Finance Ministry / Meduza
- How would Power of Siberia 2 affect European energy security?
- The pipeline would give Russia a durable, high-volume gas export route that bypasses Europe and Ukraine entirely, reducing Moscow's residual incentive to maintain any transit relationship with European buyers and weakening one of the few remaining economic levers Europe holds over Russia.
Background
Power of Siberia 2 is a proposed natural gas pipeline that would carry approximately 50 billion cubic metres per year from Siberian fields across Mongolia to China, running roughly 2,600 kilometres. Russia's Gazprom and China's CNPC have been negotiating the project since at least 2015, but talks stalled repeatedly over price: Russia sought European-style pricing benchmarked to oil; China insisted on discounted rates reflecting its alternatives, including Central Asian pipeline gas and expanding LNG import capacity. The impasse persisted through multiple bilateral summits and was repeatedly described as 'nearly finalised' without closing.
The calculus shifted after 2022, as Western sanctions eroded Gazprom's European market. Russia needed new eastward outlets; China retained its leverage precisely because it was the only buyer of scale available. In May 2026 the Kremlin announced an 'understanding on the main parameters' of the deal, a formulation that stopped short of a signed contract and which Chinese state media declined to echo. Analysts noted that 'parameters' agreements between the two countries have previously dissolved into further rounds of negotiation. The financial pressure on Moscow was acute: Russia's oil and gas revenues fell 38% year-on-year in the first four months of 2026, and the Q1 budget deficit already exceeded the government's full-year target.
For European energy security the pipeline matters because its construction would give Russia a durable, high-volume gas route that does not cross Ukraine or Turkey, reducing Moscow's incentive to maintain any residual transit relationship with Europe. For China, Power of Siberia 2 adds supply diversification but at the cost of deepening dependence on a single sanctioned partner. The project sits at the intersection of Russia's fiscal emergency, China's strategic caution, and the broader question of whether Western sanctions can outlast Moscow's ability to find alternative customers.
