Media: Russia’s China gas pipeline deal could take 10 years to deliver full exports

Russia, which recently announced progress in talks with Beijing over a new pipeline, will likely need at least ten years to significantly increase natural gas exports to China under the deal, industry sources told Reuters.

Alexey Miller, CEO of Russian gas giant Gazprom, said a “legally binding memorandum” had been signed on the construction of the Power of Siberia 2 pipeline during President Vladimir Putin’s visit to China last month.

The development highlights Moscow’s push to redirect its vast gas reserves to Asia following the collapse of its energy trade with Europe due to Western sanctions imposed after Russia’s 2022 invasion of Ukraine.

Pipeline details still unresolved

The proposed pipeline, which would traverse Mongolia, is expected to transport up to 50 billion cubic metres (bcm) of gas annually from the Arctic Yamal region – roughly equivalent to the capacity of the damaged Nord Stream pipeline to Germany.

However, key terms such as pricing, investment conditions, and the start date for deliveries have yet to be finalised after years of negotiations. Two industry sources said that even if the deal were concluded next year, it would take about five years to complete construction and begin deliveries, with another five years needed to ramp up supplies.

One person familiar with the matter noted that Gazprom does not expect the Power of Siberia 2 pipeline to reach half of its capacity before 2034–2035 if deliveries begin after 2031. Analysts at the Oxford Institute for Energy Studies described a similar timeline as plausible. “A final agreement by the end of 2026 could feasibly result in first supply by the end of 2030 or 2031, and a substantial part of the ramp-up achieved by Jan. 1, 2035,” they said in a report last month.

Russia began delivering gas from eastern Siberia to China in late 2019 via the Power of Siberia 1 pipeline, which is expected to hit its planned capacity of 38 bcm this year. During Putin’s recent visit, an additional 6 bcm was agreed via the same route.

Separately, China has agreed to import an additional 2 bcm per year from Russia via the Far Eastern route from Sakhalin, with exports scheduled to start in 2027 and ultimately reach 12 bcm annually.

China sources gas from multiple suppliers, including sea-borne liquefied natural gas and pipeline imports from Turkmenistan, with Russia accounting for roughly 22% of its gas imports in 2024.

By Aghakazim Guliyev