The Power of Siberia 2 project has long been bogged down by key issues such as gas prices and supply levels. However, ahead of his visit to Mongolia, President Putin confirmed that preparations, including feasibility and engineering studies, were proceeding as planned.
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| Russian President Putin at the welcoming ceremony at Ulaanbaatar airport, Mongolia, September 2. (Source: Sputnik) |
The Kremlin said on September 2 that Russian President Vladimir Putin has begun a state visit to Mongolia - a country expected to be on the route of the new gas pipeline connecting Russia with China - Power of Siberia 2. This is the first official visit of the Russian President to Mongolia in 5 years.
During the visit, President Putin is expected to hold talks with his host counterpart Ukhnaagiin Khurelsukh on September 3.
Russia is considering the possibility of supplying cheap gas to Mongolia if the Power of Siberia 2 pipeline to China is built, President Putin said in an interview with the Mongolian newspaper Onoodor.
The Russian president announced that preparations are underway for an intergovernmental agreement on the supply of petroleum products to Mongolia at preferential prices. Mr. Putin affirmed that Moscow always "meets the requests of our Mongolian friends to help meet their growing fuel needs at preferential prices."
Russia and Mongolia “have decades of fruitful cooperation” and developing this partnership “has been and remains one of the priorities of Russia’s foreign policy,” he added.
In fact, Russia has been negotiating with China for many years on the Power of Siberia 2 project - building a pipeline to transport 50 billion cubic meters of natural gas per year from Russia's Yamal region to China via Mongolia.
If things go as President Putin suggests, here’s the latest on the Power of Siberia 2 project, following the Mongolian government’s decision to not include the 2,594-km Power of Siberia 2 natural gas pipeline linking Russia and China through its territory in its four-year spending plan, a sign that the megaproject could be shelved. And Mongolia doesn’t expect construction to start on the ambitious project anytime soon.
Additionally, the Power of Siberia 2 natural gas pipeline, which would bring gas to northern China, is also uncertain as it faces competition from a growing shift to renewable energy and Beijing's broader strategy to avoid overreliance on any one exporter.
“Northern China’s access to the global liquefied natural gas market is expanding, and the global LNG market is likely to remain oversupplied for the rest of this decade,” said Joseph Webster, senior fellow at the Atlantic Council. “In addition, northern China can tap additional volumes from domestic production and existing pipeline routes from Central Asia to China.”
Approval of the pipeline is expected to change Gazprom’s current fortunes by further tying it to a large consumer market, but Beijing’s tough stance also underscores how the Russia-Ukraine conflict has cost Mr Putin his leverage.
Signing a deal for a project as vast as Power of Siberia 2 is incredibly complicated, but China clearly believes it holds the better cards.
Previously, the delay of the Power of Siberia 2 project caused many questions in the international media, claiming that "the Beijing-Moscow friendship has boundaries", despite the famous statement of Chinese leader Xi Jinping and his Russian counterpart Vladimir Putin, that bilateral relations "have no limits".
Against this backdrop, Beijing is said to be “easing” its energy cooperation with Russia and tightening its ties with Turkmenistan, as the new China-Turkmenistan pipeline appears to have some more obvious advantages. So far, in 2024, Turkmenistan has surpassed Russia in supplying gas to China in terms of revenue.
A report published by Uzbek news outlet Spot.uz said Turkmenistan was China's top gas supplier in the January-July 2024 period, exporting $5.67 billion worth of gas. Russia came in second with $4.69 billion in sales.
However, as Webster notes, Power of Siberia-2 and the China-Turkmenistan pipeline supply different regions of China and do not necessarily pose an option to cancel the other, although “China’s future and even current natural gas needs remain a major analytical blind spot.”
The Power of Siberia 2 project is part of Russia’s strategy to make up for much of its lost gas revenues in Europe, where Russian gas giant Gazprom has been supplying more than 150 billion cubic meters of gas a year since the start of the special military operation in Ukraine. It is a successor to the existing pipeline of the same name, which already supplies Russian gas to China and is expected to reach its planned capacity of 38 billion cubic meters a year by 2025.
Source: https://baoquocte.vn/du-an-power-of-siberia-2-mang-qua-toi-mong-co-tong-thong-putin-da-co-cach-thong-nut-co-chai-duong-ong-khi-dot-nga-trung-quoc-284827.html
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