Power of Siberia 2 stuck on gas price, branch issues

Beijing has kept progress of the discussion about building a new gas pipeline from Russia to China slow, as issues such as the gas price, a proposed new branch and a potential partnership in downstream businesses still linger.

The feasibility study of the “Power of Siberia 2” project, designed to deliver 50 billion cubic meters (bcm) of natural gas from Russia to China annually, was approved by Russia’s Gazprom in 2021. Both sides reportedly achieved a consensus in principle last month.

While Moscow hopes to close the deal in the first quarter of this year, Beijing has so far adopted a wait-and-see approach in order to increase its bargaining chips at the negotiation table.

Chinese commentators say China wants the Russian side to “show more sincerity.” They add that Russia needs money to fund its battles in Ukraine – but China is not in a hurry to strike a deal; it has other options to diversify its energy supply.

“Although heads of the Chinese and Russian governments met in Beijing in December and discussed how to push forward an agreement for the Power of Siberia 2, it’s not easy to implement what was discussed,” a Shanxi-based columnist using the pen name of “Song Jun“ writes in an article published earlier this month.

“The two sides reached a consensus in principle but they still need to discuss the gas prices, delivery and payment methods,” he says. “Before signing a contract, they will have to resolve a lot of operational problems and find solutions to fulfill their own needs, market positions and economic benefits.”

”Although Russia urgently needs money and has a good relationship with China, Beijing will not allow the Russian side to set the gas price freely,” Jiang Fuwei, a Hainan-based columnist, says in an