Russia and China Move Ahead With Power of Siberia-2 Pipeline, But Beijing Holds the Cards

by Emmitt Barry, with reporting from Worthy News Jerusalem Bureau Staff

(Worthy News) – Russia and China advanced long-stalled plans for the massive Power of Siberia-2 natural gas pipeline on Monday, signing a legally binding memorandum to construct the project. But the absence of key commercial terms underscored how Beijing now holds decisive leverage in its energy dealings with Moscow.

The agreement, announced during President Vladimir Putin’s talks with Chinese leader Xi Jinping in Beijing, would carry up to 50 billion cubic meters of Russian gas annually through Mongolia to China. The project, a sequel to the first Power of Siberia pipeline launched in 2019, is designed to replace lost European markets for Russian gas as sanctions continue to bite following the invasion of Ukraine.

Yet Moscow’s desperation has tilted the balance sharply in China’s favor. Pricing, financing, and construction timetables remain unresolved–issues that have stalled the project for years. With ample alternative LNG supplies from the Middle East and elsewhere, Beijing can delay a final deal and push for more favorable terms. Analysts say China is likely to secure gas at lower prices than Russia charged Europe, exploiting Moscow’s urgent need for long-term buyers.

“China is interested, but this isn’t a final deal,” said Alexander Gabuev of the Carnegie Russia Eurasia Center. “The relationship is increasingly asymmetrical and China has all the cards.” Russia’s share of China’s overall trade remains under 5%, while China now accounts for nearly a third of Russia’s foreign commerce–highlighting Moscow’s growing dependence.

For Beijing, the calculus extends beyond energy. The war between Israel and Iran has raised concerns about the stability of Middle Eastern supplies, while Xi has pressed ahead with a vision of “hard connectivity” through cross-border infrastructure. Still, Chinese officials reportedly maintain an informal cap of around 20% on energy imports from any single supplier, a policy that has long slowed progress on the pipeline.

Gazprom CEO Alexei Miller said the pipeline would operate for 30 years once completed, adding that exports via the existing Power of Siberia route will soon increase to 44 bcm annually from 38 bcm. But without clarity on financing and pricing, doubts remain over Russia’s ability to execute one of the world’s costliest gas projects at a time when its bargaining power is waning and its economy increasingly hinges on China.

The announcement came as Putin and Xi prepared to attend a military parade in Beijing marking the 80th anniversary of Japan’s defeat in World War II, part of a week of high-profile diplomacy aimed at presenting China and Russia as counterweights to U.S. influence.

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