The construction of the Power of Siberia 2 gas pipeline to China, which Russia planned to start in the first quarter of 2024, may be postponed.
This was reported by The Financial Times with reference to the leadership of Mongolia, through whose territory the highway is to pass, The Moscow Times reports.
Russia and China have not yet agreed on key details of the project, said Mongolian Prime Minister Luvsannamsraiin Oyuun Erdene.
“The two sides still need time to conduct more detailed economic studies,” he said.
According to the Prime Minister, record global gas prices over the past two years have complicated negotiations.
“The Chinese and Russian sides are still making calculations and assessments, working on the economic benefits,” Oyun-Erdene said.
On January 25, Russian Deputy Prime Minister Alexander Novak said that the construction timeline for Power of Siberia-2 and its main technical and economic indicators would be finalized “after signing agreements with Chinese partners.”
In October, Russian Deputy Prime Minister Viktoriya Abramchenko said that construction of the pipeline would begin in the first quarter of 2024, immediately after the approval of the design documentation for the Soyuz Vostok gas pipeline through Mongolia.
It is noted that a new contract with China is very important for Gazprom, which has lost the European market and lost more than half of its exports after Russia’s invasion of Ukraine. Gas pumping to Europe fell to its lowest level since the last years of the USSR. Gazprom was also forced to cut production by almost a third, a record in its history. The company expected to commission Power of Siberia-2 by 2030.
Last year, Russian President Vladimir Putin met twice with Chinese President Xi Jinping to try to convince him to agree to the project, which the Kremlin has been promoting for more than seven years, but both times the talks ended in nothing.
At the end of May last year, it became known that instead of the 50 billion cubic meter Power of Siberia-2, China decided to prioritize a new gas pipeline from Turkmenistan. Although Turkmen gas is 30% more expensive than Russian gas, and negotiations on a discount with Ashgabat have failed, Beijing has given the green light to the Line D project, which will import 30 billion cubic meters from Turkmenistan annually, Reuters sources said.
China is already receiving gas from the eastern part of Russia through the first Power of Siberia gas pipeline, which began operating in 2019. Last year, it transported about 23 billion cubic meters of gas, but this compensates for only one eighth of the previous exports to Europe, which at its peak reached 170-180 billion cubic meters per year. Source:
