“Power of Siberia-2” is canceled

The construction of the Power of Siberia-2 gas pipeline has been suspended, reports the Chinese publication The South China Morning Post, citing former member of the Mongolian Security Council Munkhnar Bayarlhavg.

The second part of the Power of Siberia gas pipeline was supposed to pass through Mongolia. The country planned to build 2,500 km of the pipeline, but the authorities did not include it in the national development plan until 2028.

“We are entering a long standstill because Moscow no longer believes it will get the agreement it wants from Beijing, and the project may be postponed until better times, ”said Munchnar Bayarlhavg.

Russia has had problems with gas pipeline construction for a long time. Already in 2022, Putin offered China to increase the purchase of Russian gas to 100 billion cubic meters per year, but the two countries could not agree on the price.

Beijing asked to reduce the price of gas, which goes through the second branch of “Power of Siberia”, to 60 dollars per thousand cubic meters, ie almost to the level of the domestic market, which Moscow gives supported by budget subsidies. China now buys Russian gas at a price of $260 per thousand cubic meters.

Disagreement on this matter was the reason why the head of Gazprom, Alexei Miller, did not accompany Putin on his trip to China in May. At that time, the topic of “Power of Siberia-2” was one of the main issues in the talks between the Russian leader and Xi Jinping. In addition, Putin then asked China not to participate in the Ukrainian peace forum and to strengthen the activities of Chinese banks in Russia.

Russian gas exports to Europe in 2023 have fallen to their lowest level since the 1970s. After the explosion at Nord Stream, Russia cannot easily ship Russian gas destined for Europe to China. Europe is supplied from the West Siberian fields, and China is supplied from the East Siberian fields (via the Power of Siberia-1 gas pipeline). The purpose of “Power of Siberia-2” is to send gas to China from the West Siberian fields as well

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