Russia and China Reach Agreement on Power of Siberia 2 Gas Pipeline

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Russia and China Reach Agreement on Power of Siberia 2 Gas Pipeline

Flags of China and Russia (© Shutterstock/Vitalii Vodolazskyi)
Flags of China and Russia (© Shutterstock/Vitalii Vodolazskyi)

Moscow, Russia - Russian President Vladimir Putin announced on Tuesday that Russia and China had reached an agreement on the Power of Siberia 2 gas pipeline. The new pipeline will connect Siberia to northwest China and will be a 2600-km pipeline originating in the Bovanenkovo and Kharasavey gas fields in Yamal.

"All agreements have been reached," Russia's president Vladimir Putin said on Tuesday, March 21, 2023, adding that economic cooperation between Moscow and Beijing was a "priority" for Russia. Putin announced talks with Chinese leader Xi Jinping.

The agreement comes as Russia seeks to strengthen its energy alliance with Beijing amid strained ties with the West over Ukraine and other issues. Russia already sends gas to China via its Power of Siberia 1 pipeline and by shipping liquefied natural gas (LNG). It exported 16.5 billion cubic metres (bcm) of gas to China in 2021.

Under the 30-year contract signed in February 2022, Gazprom, which has a monopoly on Russian gas exports by pipeline, will supply Chinese state energy major CNPC with 10 billion cubic metres of gas a year, Pipeline Technology Journal reported last year.

The Kremlin has been eager to expand its energy market in China, which will need more gas in coming years to substitute for an eventual phasing down of coal, according to Vita Spivak, an energy analyst at Control Risks, a global consulting firm.

In December 2019, China and Russia launched the Power of Siberia gas pipeline, a more than 6,000 km pipeline, connecting Russia's vast natural gas resources to the energy-starved People's Republic of China. Both Chinese President Xi Jinping and Russian President Vladimir Putin inaugurated the pipeline via a joint video conference in Sochi.

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