Russia’s new gas pipeline to China may face delay

Russia’s planned new Power of Siberia-2 gas pipeline to China which was anticipated to begin this year may be delayed, according to Reuters citing the Financial Times report on Sunday.

Russia has been in talks to construct a new pipeline that would transport 50 billion cubic metres of gas annually from Northern Russia to China through Mongolia. This amount of gas is nearly equal to that of the Nord Stream 1 pipeline under the Baltic Sea, which is currently idle and was damaged in 2022.

L.Oyum-Erdene, Mongolia’s PM, told the paper that the two countries haven’t yet agreed on the key details of the mega project. He added that the past two years’ record global gas prices have complicated negotiations.

Gazprom which will run Power of Siberia-2 has stated that it plans to begin gas delivery by 2023. However, consensus on important matters, such as cost, is still elusive.

“Those two sides still need more time to do more detailed research on the economic studies,” Oyun-Erdene told the FT. “The Chinese and Russian sides are still doing the calculations and estimations and they are working on the economic benefits,” he continued.

Gazprom and the Kremlin haven’t replied to Reuters for a comment on the matter, while contact with China’s foreign ministry was not immediately possible.

Notably, China is receiving more gas from Russia as a means of making up for the majority of its gas sales in Europe that have been lost since Moscow invaded Ukraine almost two years ago.

This has led Western nations to impose sanctions on Moscow and reduce their reliance on Russian energy.