Russia and China Plan New Siberia Pipeline Project

Russia and China Reach Understanding on Power of Siberia 2 Pipeline Project

A summit between Russian President Vladimir Putin and Chinese President Xi Jinping has resulted in an agreement on the route and construction of the Power of Siberia 2 (POS-2) pipeline project. The proposed 2,600km natural gas pipeline would carry Russian gas from western Siberia through Mongolia to China.

The pipeline is expected to have a capacity of 50 billion cubic metres per year, equivalent to about 525 terawatt-hours of energy. This would be nearly twice the United Kingdom’s annual electricity consumption. The project aims to replace revenue lost by Russia since European countries reduced their gas imports from Russia following Moscow’s invasion of Ukraine in February 2022.

For China, the pipeline offers a more secure alternative to imported liquefied natural gas (LNG), which is cooled into liquid form and transported by ship. Most of China’s LNG imports must be shipped through strategic chokepoints such as the Strait of Hormuz and the Strait of Malacca.

Analysts note that significant hurdles remain before the project can become a reality. The pipeline’s construction timeline is expected to take several years, with some estimates suggesting it may take up to 10 years from start of construction to full capacity.

The agreement on the main parameters of the project has been reached, but details such as price and commercial terms are still to be finalised. Analysts agree that these negotiations are ongoing, with China being less urgent in reaching a deal compared to Russia. The project’s technical feasibility is seen as a positive aspect, given Gazprom’s experience in building large-capacity pipelines through challenging terrain.

The first Power of Siberia (POS-1) pipeline has already been completed, carrying gas from two eastern Siberian fields to the Russia-China border. Its construction began after a 2014 agreement, with deliveries starting in 2019 and reaching full capacity in 2024. The new POS-2 pipeline is expected to cross a third country – Mongolia – and its timeline may be similar to that of POS-1, but with potentially longer ramp-up time due to its larger capacity.

The Kremlin has confirmed that the president discussed the project’s main parameters during his meeting with Xi on Wednesday, stating that there is already a shared understanding of these parameters. However, no timetable for carrying out the project has been set.

Source: Al Jazeera