Russia and China Sign Landmark Agreement for Power of Siberia 2 Gas Pipeline

On September 2, 2025, Russia and China signed a legally binding memorandum to construct the Power of Siberia 2 gas pipeline, a significant development in their energy partnership. The pipeline is projected to deliver up to 50 billion cubic meters (bcm) of natural gas annually from Russia's Yamal gas fields to China via Mongolia over a 30-year period. This agreement follows nearly two decades of negotiations, which had previously stalled due to disagreements over pricing and construction terms.

Hindustan TimesChina and Russia sign mega gas pipeline deal worth over $400 billion, Power of Siberia 2 pipeline defies EU and western pressureRussia’s Gazprom boosts gas supplies to China, plans new pipelineRussia, China Ink Major Deal for New Gas PipelineRussia and China sign deal to build €11.7bn Power of Siberia 2 gas pipeline — Novaya Gazeta Europe

The Power of Siberia 2 pipeline is expected to be one of the largest and most capital-intensive gas projects globally, with an estimated cost of around $25 billion. Gazprom CEO Alexei Miller emphasized that the project would enhance Russia's energy exports to China, particularly as Moscow seeks to offset the significant decline in gas sales to Europe following the imposition of sanctions due to the Ukraine conflict. Alongside this new pipeline, Gazprom will also increase the capacity of the existing Power of Siberia pipeline from 38 bcm to 44 bcm annually.

Russia’s Gazprom boosts gas supplies to China, plans new pipelineChina and Russia sign mega gas pipeline deal worth over $400 billion, Power of Siberia 2 pipeline defies EU and western pressureReutersHindustan TimesOil Price

The agreement is seen as a strategic pivot for Russia, reinforcing its energy ties with China amid ongoing geopolitical tensions with the West. Analysts suggest that this partnership allows China to diversify its energy sources while reducing reliance on liquefied natural gas (LNG) imports from the United States. The deal also signals a shift in global energy dynamics, as both nations aim to challenge Western influence and sanctions.

China and Russia sign mega gas pipeline deal worth over $400 billion, Power of Siberia 2 pipeline defies EU and western pressureAl Jazeera (website)Russia, China Sign New Gas Pipeline DealRussia’s Gazprom boosts gas supplies to China, plans new pipelineReuters

Despite the signing of the memorandum, key details regarding the pricing of gas supplied through the Power of Siberia 2 pipeline remain unresolved. Miller indicated that pricing negotiations would occur separately, with expectations that the rates would be lower than those charged to European customers. This pricing strategy reflects the vast distances and challenging terrain involved in the pipeline's construction.

Hindustan Times

While the agreement has been framed as a breakthrough, some analysts express skepticism regarding its immediate impact. Concerns persist about the lack of clarity on financing, construction responsibilities, and the potential for China to demand steep discounts on gas prices. Additionally, the absence of confirmation from Chinese state media regarding the details of the agreement raises questions about the project's future viability.

Al Jazeera (website)

The signing of the Power of Siberia 2 agreement occurs against a backdrop of increasing economic cooperation between Russia and China, particularly following the sanctions imposed on Russia by Western nations. The two countries have reportedly signed over 20 cooperation agreements during recent high-level meetings, further solidifying their partnership. This collaboration is viewed as a response to the perceived decline of Western influence in global affairs.

Power of Siberia 2: Moscow announces gas pipeline deal with Beijing (which is silent)

The Power of Siberia 2 pipeline represents a significant step in the evolving energy relationship between Russia and China. As both nations navigate the complexities of international sanctions and shifting market dynamics, the successful implementation of this project could reshape global energy flows and reinforce the strategic alliance between these two major powers. However, the unresolved issues surrounding pricing and financing will be critical to the project's long-term success.

China and Russia sign mega gas pipeline deal worth over $400 billion, Power of Siberia 2 pipeline defies EU and western pressure