Pipeline deadlock pushes China to boost power of Siberia 1 imports from Russia

China is exploring the possibility of increasing its gas imports from Russia through the existing Power of Siberia 1 pipeline, as negotiations over a second pipeline have stalled, sources in the energy sector told Reuters. This impasse has hindered Moscow’s efforts to secure new export routes for its gas.

Energy discussions are expected to feature prominently during the upcoming meeting between Russian President Vladimir Putin and Chinese President Xi Jinping in China next week. However, the $13.6-billion Power of Siberia 2 project, designed to deliver 50 billion cubic meters of gas annually to China’s northwest, is unlikely to see a breakthrough during the visit, the sources said.

Instead, China is reportedly considering expanding purchases through Power of Siberia 1, which currently supplies 38 bcm per year. The sources spoke on condition of anonymity due to the sensitivity of the matter.

Russia is keen to grow its oil and gas exports to Asia after losing much of its European market following Western sanctions imposed in response to Moscow’s invasion of Ukraine. Historically, for over five decades, Russia supplied Europe with up to 180 bcm of gas annually from West Siberia, accounting for around 40% of the continent’s gas needs and generating up to $90 billion a year.

Gas deliveries to China began in 2019 via the Power of Siberia 1 pipeline from East Siberia. The West and East Siberian gas-producing regions remain unconnected, and Russia had planned Power of Siberia 2 to reroute gas from West Siberia to China.

Originally, Gazprom designed the project to make China and the EU compete for West Siberian gas, a strategy that became even more critical after Europe largely halted Russian gas imports in 2022.

Despite more than a decade of negotiations, Moscow and Beijing have not reached an agreement on gas pricing or pipeline financing. Gazprom declined to comment when contacted by Reuters.

Industry sources in Beijing said Gazprom and China National Petroleum Corporation (CNPC) are discussing a 6 bcm per year increase in Power of Siberia 1 supplies starting in 2031. At a gas price of $250 per 1,000 cubic meters, this boost could generate roughly $1.5 billion annually for Gazprom, according to Reuters calculations.

China’s state-owned PipeChina has begun studies to expand its domestic gas network to accommodate additional volumes from Power of Siberia 1, with construction potentially starting in the second half of 2026. PipeChina did not respond to requests for comment.

Discussions are also ongoing about raising flows through Power of Siberia 1 to 45 bcm per year. Sergey Sanakoev, head of Moscow’s Asia-Pacific Research Centre and a participant in Russia-China energy talks, noted that the pipeline has the capacity to exceed its current 38 bcm. “This does not mean that Power of Siberia 2 will be abandoned,” he added.

In addition to these projects, Russia plans to begin gas deliveries to China via a pipeline from Sakhalin Island in 2027, with an expected annual supply of 10 bcm.

China’s growing domestic gas production and renewable energy capacity have reduced its energy demand, yet geopolitical risks, including sanctions, make imports from Russia an attractive option, according to Tatiana Mitrova of Columbia University’s Centre on Global Energy Policy.

By Tamilla Hasanova