Negotiations between Russia and China over the proposed “Power of Siberia-2” natural gas pipeline have hit a complete deadlock following Beijing’s demands for steep price discounts, according to a report by The Wall Street Journal.

Sources familiar with the talks said the Russian negotiating team “hit a wall” after Beijing demanded that Moscow price the gas at its heavily subsidized domestic rate of about $50 per thousand cubic meters.

The pricing demand comes despite China already receiving substantial concessions. This year, Beijing pays $258.8 per thousand cubic meters—a 39% discount compared to the $420.2 average paid by Gazprom’s other international clients.

Internal Russian economic forecasts show China's price is slated to drop further to $223.9 next year. Still, Beijing is pushing for a rate eight times cheaper than what Russia's remaining global customers pay.

During Russian President Vladimir Putin's recent visit to Beijing, Chinese officials reportedly told the Russian delegation to drop the pipeline issue until market conditions change.

The “Power of Siberia-2” project was conspicuously absent from the 42 bilateral agreements signed during the summit, casting doubt on a "legally binding memorandum" announced by Putin and Gazprom Chief Executive Alexey Miller in September 2025.

Industry experts suggest Beijing’s hesitation is rooted in strategic diversification.

Jörg Wuttke, a partner at the DGA Group, pointed out that China has access to ample global gas supplies and expects its import demand to peak by the mid-2030s, reducing the appeal of a project that will take six years to build.

Analysts believe China is playing a long game. Alexander Gabuev, director of the Carnegie Russia Eurasia Center, told the Journal that Beijing’s strategy is to wait.

By stalling, the Chinese leadership hopes to sign a deal on highly favorable terms once Russia's economic leverage deteriorates further.

While the public energy negotiations have stalled, covert military-technical cooperation between the two nations reportedly continues to deepen behind closed doors, including joint partnerships on satellite defense and autonomous drones.