China and Russia have signed a deal to build the Power of Siberia 2 pipeline, a project poised to reshape global energy flows. Russia announced the agreement Tuesday during President Putin’s meeting with President Xi Jinping in Beijing, with the two sides signing a legally binding “memorandum of construction.” Mongolian President Khurelsukh Ukhnaa also joined the trilateral talks.
“Negotiations will now turn to financing the pipeline and finalizing the commercial terms of supply,” Gazprom CEO Alexei Miller, head of Russia’s state-owned gas company, said, adding that the company will release those details separately.
The pipeline, which will transit through Mongolia, could carry 50 billion cubic meters of gas per year from Russia and is expected to operate for 30 years once completed.
The project could reshape the LNG market, impacting suppliers such as Qatar, Australia, and the U.S. Preliminary estimates suggest that if construction begins this year, the pipeline could be operational in the early 2030s.
In addition, Moscow and Beijing signed commercial agreements to increase gas flows through existing routes by 8 bcm, targeting a total of 56 bcm annually before the new pipeline comes online. Putin emphasized that his “close communication” with Xi “reflects the strategic nature of Russian-Chinese ties, which are at an unprecedentedly high level.”
