The Power of Siberia 2 pipeline will boost supplies to over 100 bcm of gas a year, according to the Russian president
Pricing for the billions of cubic meters of Russian gas that will flow through the Power of Siberia 2 pipeline to China will be based on market principles, set by an objective formula rather than politics, President Vladimir Putin has said.
Speaking to journalists in Beijing on Wednesday, Putin said the two countries had reached consensus on the deal structure – reportedly the largest gas project on Earth. “This is not charity – we’re talking about mutually beneficial agreements based on market principles,” he stated.
The agreement was announced on Tuesday by Gazprom chief Aleksey Miller after a meeting in Beijing attended by Putin, Chinese President Xi Jinping, and Mongolian President Ukhnaagiin Khurelsukh.
According to Putin, the project was made possible by rising energy demand from China’s expanding economy and Russia’s ability to meet it.
He stressed that China will be buying Russian energy at market rates, unlike the EU, which has to pay increased costs due to its push to wean itself off Russian oil and gas.
The Russian president said the deal was the result of years of work, adding, “Everyone is satisfied, everyone is pleased with the outcome.”
Talks on the project have been ongoing since 2006, with the route and pricing terms repeatedly debated. The pipeline is expected to operate for at least 30 years once completed.
The 50 billion cubic meter per year pipeline will carry gas from western Siberia through Mongolia to northern China, with the Mongolian leg known as the Soyuz Vostok. Supplies will also be available for sale to Mongolian buyers.
The new Power of Siberia 2 route, together with existing pipelines and others set to expand, will boost Russian gas deliveries to China to over 100 billion cubic meters a year, Putin said.
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