Bloomberg: Moscow’s pipeline deal with Beijing undermines US energy leverage

Russia’s Gazprom PJSC announced it has signed a legally binding agreement to construct the long-discussed Power of Siberia 2 gas pipeline to China via Mongolia, a project the Kremlin is likely to tout as a political victory.

The company also pledged to expand gas deliveries through other routes, Caliber.Az reports via Bloomberg.

Speaking in Beijing, Chief Executive Officer Alexey Miller told Russian news wires that the new pipeline could deliver as much as 50 billion cubic meters of gas annually for 30 years. He added that the price of supplies to China would be lower than those charged to European customers.

Beijing, however, has not publicly confirmed the deal. China’s state-run Xinhua News Agency reported on more than 20 bilateral agreements signed during recent meetings, including in the energy sector, but did not specifically mention the Power of Siberia 2 project.

The proposed pipeline has been under discussion for years. For Moscow, it is seen as critical to offset the collapse in European demand following Russia’s invasion of Ukraine and looming plans in the EU to phase out Russian gas imports entirely by 2027. China, by contrast, has been cautious, with slowing demand growth and concerns over dependence on a single supplier weighing on its calculations.

If confirmed, the agreement would mark a diplomatic coup for President Vladimir Putin, underlining the deepening partnership with Beijing as Russia faces Western sanctions. The timing coincides with the Shanghai Cooperation Organization summit in China, which comes amid escalating U.S. tariffs and sharper rhetoric from Washington.

Despite Miller’s announcement, key details remain unclear. Price negotiations have not been finalized, no timeline has been set for construction or gas flows, and it is uncertain whether China will commit to purchasing flexible volumes or be locked into the pipeline’s full capacity. Financial arrangements also remain undisclosed.

Miller described the Power of Siberia 2, the Soyuz-Vostok transit link through Mongolia, and the associated delivery infrastructure in China as “the largest, most massive, and capital-intensive gas project in the world.”

Gazprom also agreed to expand flows through its existing Power of Siberia pipeline by 6 billion cubic meters annually, raising its total capacity to 44 billion cubic meters. Meanwhile, shipments via a separate Far Eastern pipeline, scheduled to begin in 2027, are expected to exceed the initially planned 10 billion cubic meters a year.

By Khagan Isayev