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Power of Siberia 2 pipeline: Russia, China sign landmark oil deal | Key details
Once completed, the pipeline could supply 50 billion cubic meters (bcm) of gas annually to China from Russia’s Arctic gas fields.
Russia and China signed a legally binding memorandum to construct the Power of Siberia 2 pipeline, a massive and highly ambitious gas project that could reshape the global energy map, Gazprom said on Tuesday.
According to Alexei Miller, Gazprom CEO, the agreement includes building the Power of Siberia 2 and the Soyuz Vostok transit segment through Mongolia. Through this agreement, Russia agreed to supply additional volumes of natural gas to China.
"Today, a legally binding memorandum was signed on the construction of the Power of Siberia 2 gas pipeline and the Soyuz Vostok transit gas pipeline through Mongolia," Miller said.
The "no limits" partnership between China, the world's biggest consumer of energy, and Russia, the world's biggest producer of natural resources, has strengthened since the West imposed sanctions to punish Russia for the war in Ukraine.
Why is this pipeline significant?
Once completed, the Power of Siberia 2 pipeline could supply 50 billion cubic meters (bcm) of gas annually to China from Russia’s Arctic gas fields. Soyuz Vostok is designed to be the portion of the Power of Siberia 2 pipeline, traversing Mongolia.
The agreement aims to increase supplies via the existing Power of Siberia pipeline, which runs from Eastern Siberia to China, to 44 billion cubic metres (bcm) a year from 38 bcm.
Cost of the pipeline
Key questions regarding the pricing and construction responsibilities remained unanswered in the agreement, Reuters reported.
But the price of gas supplied via the pipeline - one of the key factors for understanding the cost of building the pipeline and how those costs will be shared amongst the parties involved - will be agreed separately, Miller was quoted by the TASS state news agency as saying.
