Moscow and Beijing agree on 30-year gas supply deal of 50 billion cubic meters annually

Gazprom and China’s CNPC have signed a memorandum of strategic partnership that includes agreements on the construction of the “Power of Siberia-2” pipeline and the trans-Mongolian “Eastern Union” pipeline, RBC reports, citing Russian company head Alexey Miller.

Under the new agreements, supplies are planned for a 30-year period, with up to 50 billion cubic meters delivered annually.

The parties also agreed to increase current supply volumes: via the “Power of Siberia” pipeline from 38 billion to 44 billion cubic meters, and via the “Eastern Route” from 10 billion to 12 billion cubic meters.

Miller noted that the announcement followed a trilateral meeting of representatives from Moscow, Beijing, and Ulaanbaatar.

The design of “Power of Siberia-2” began in 2020. The pipeline will have a total length of approximately 6,700 km, with 2,700 km passing through Russian territory. In May 2023, the Russian government approved the agreement to supply gas to China.

However, negotiations had been dragging. As Financial Times reported last June, Moscow was not satisfied with the price proposed by Beijing.

During a visit to Moscow in May this year, Chinese President Xi Jinping discussed the “Power of Siberia-2” project with Russian President Vladimir Putin, instructing to accelerate its implementation. Russian Deputy Prime Minister Alexander Novak stated that part of the technical and economic feasibility study has been completed, and discussions on economic terms are ongoing.

At the end of June, The Wall Street Journal, citing sources close to the Chinese government, reported that Beijing’s interest in “Power of Siberia-2” had increased due to the Iran-Israel conflict. Concerns over the reliability of energy supplies from the Middle East have led China to explore alternative options.