Putin expected to push gas pipeline plan
Russian president likely to raise issue of stalled Power of Siberia 2 project with Xi during state visit this month amid Beijing’s silence on topic
During his state visit to China – set for later this month – Russian President Vladimir Putin is expected to broach an important subject with his counterpart, Xi Jinping: the Power of Siberia 2 natural gas pipeline, a project that appears to have stalled.
The natural gas pipeline, designed to connect Russia and China via Mongolia, is a signature project symbolising the “no-limits” strategic partnership between Beijing and Moscow. If completed, it would divert 50 billion cubic metres of natural gas per year to north China, redirecting a supply that once went to Europe.
Any progress in the project would be an effective gauge of the state of their bilateral relations, carefully scrutinised by the European Union and United States since the outbreak of war in Ukraine and a potential trigger point for new sanctions.
“It’s the elephant in the room”, said a Russian source who has knowledge of the issue and requested anonymity due to the project’s sensitivity.
The project matters a great deal to Putin, who just started his third consecutive presidential term, but it remains unclear whether he can coax it back to life.
Within Russia, the project continues to be a subject of ample attention – and some anxiety. News agency IA REX said last Wednesday that the project “remained in the shadows”, citing speculation that “Beijing did not need the project” or there were disagreements over price.
Munkhnaran Bayarlkhagva, a former official at Mongolia’s National Security Council, said discussion on construction of the Power of Siberia 2 was in “a weird limbo”.
“I haven’t noticed anyone from the Mongolian political class make any recent comments on the pipeline,” he added, noting that June’s parliamentary election was fast approaching.
Ulaanbaatar is widely believed to be apprised of any developments in the project, as the pipeline must pass through the country.
“Around the new year the Russian side changed the entire governmental team that was dealing with Mongolia, so maybe they are getting used to their new positions,” he said.
The Chinese side has stayed mostly silent on the topic. Last Tuesday, Chinese ambassador to Russia Zhang Hanhui told Russian media RIA Novosti that companies from the two countries were “actively discussing the details”, and Beijing advocated an integrated approach on pipeline operations, from production to processing.
“I believe that the construction of the Power of Siberia 2 will develop according to the domestic needs of China,” said Li Lifan, a Russia specialist with the Shanghai Academy of Social Sciences. “It won’t be advancing as fast as some media have described.”
Dong Jinyue, principal economist at BBVA, said more countries than Russia supplied China with natural gas – the United States, Australia, Indonesia, Malaysia and Qatar, to name a few – although the share from its northern neighbour was large.
“The government always increases the natural gas strategic reserve, even when demand is low,” she added. “China is [also] experiencing a transformation to green energy, such as solar, wind and water.”
Figures from the Spanish bank showed that China’s total gas consumption was 394.53 billion cubic metres last year, and its annual usage is projected to reach 550 to 600 billion cubic metres by 2030.
The Power of Siberia 2 will develop according to the domestic needs of China LI LIFAN, RUSSIA SPECIALIST