Gazprom on Thursday said it has a “legally binding” memorandum with China National Petroleum Corp. to build a new pipeline, known as Power of Siberia 2, to carry Russian natural gas to China. Company and Russian officials framed the announcement as a deepening energy partnership with Beijing, but the plan left crucial questions unanswered about price, financing and a construction timetable.
The proposed pipeline would stretch roughly 6,700 kilometers (4,163 miles) from fields in the Yamal Peninsula in western Siberia, past Lake Baikal and across Mongolia into China. Gazprom said the line would have capacity of about 50 billion cubic meters (bcm) a year. That compares with the up to 180 bcm that Russia historically supplied to Europe by pipeline before most shipments were cut off in the wake of Moscow’s 2022 invasion of Ukraine.
Gazprom CEO Alexei Miller made the announcement during a meeting between President Vladimir Putin and Chinese President Xi Jinping, but he and other officials provided few operational or commercial specifics. There was no public agreement on gas pricing, no clear financing plan and no firm construction schedule. Analysts and energy experts said those omissions suggest the deal is as much political signaling as a finalized commercial arrangement.
Power of Siberia 2 would supplement an earlier Power of Siberia line that runs from other eastern Siberian fields to China and has a capacity of about 38 bcm per year. Even if completed at full capacity, the new line could not fully replace the volume and revenue Russia lost from Europe.
"The announcement is an absolutely perfect way ... to say: ‘Look, we’re not all talk, here’s an actual measure,’" said Annette Bohr, an associate fellow in the Russia and Eurasia program at Chatham House in London, referring to the public optics of the Putin-Xi gathering. She added that while the memorandum is a step forward for Gazprom "it’s not a done deal. There’s no confirmed timeline, no definitive pricing agreement."
Analysts said China is likely the dominant party in any negotiations. Michal Meidan, head of China energy research at the Oxford Institute for Energy Studies, noted Beijing has repeatedly sought low prices in talks with Russia and could opt to commit only to a portion of any proposed pipeline capacity at significant discounts. "China is definitely in the driver’s seat," Meidan said, adding that Beijing has multiple other sources for gas imports, including liquefied natural gas (LNG) bought on global markets.
Alexander Gabuev, director of the Carnegie Russia Eurasia Center, said the memorandum highlights Beijing’s leverage. "If Russia is ready to provide conditions that satisfy China’s demands, then it’s probably a green light," he said. "But without that, it’s just a friendly reminder that Russia needs to accommodate some of Chinese demand. And it’s telling you that China has tremendous leverage, and has, in a way, the seniority in this relationship."
The announcement also fits a broader geopolitical pattern of energy ties used as signaling. Beijing has been buying some Russian LNG from projects such as the Arctic-2 terminal, which Western governments have targeted with sanctions. Analysts say Moscow and Beijing may be using high-profile energy announcements to demonstrate they can deepen ties despite U.S. pressure and trade measures.
Still, technical and commercial obstacles remain. Building a trans-Siberian-Mongolian pipeline would require massive investment and coordinated financing; neither Moscow nor Beijing disclosed who would shoulder those costs. Negotiations on gas sales have historically stumbled over price, and Russia’s past experience selling Yamal gas to Europe yielded much larger revenues than a 50-bcm-a-year link to China would generate.
The European Union’s effort to end remaining Russian pipeline imports by 2027 increases the imperative for Moscow to find alternative markets, but the scale of the Chinese route would cover only a portion of Europe-bound volumes. Analysts also point to uncertainty about China’s future gas demand. Long-term demand will hinge on how quickly China reduces coal use, deploys renewable and battery storage capacity, and expands nuclear power. "It’s not clear that it really does need Power of Siberia 2," Meidan said, noting large uncertainty about Chinese gas consumption into the 2030s.
Energy trade between Russia and other Asian buyers has continued despite Western sanctions and trade frictions. Observers cited public examples of New Delhi and Beijing increasing purchases of Russian energy in recent years, and they said those flows have become a component of broader strategic realignment among Moscow, Beijing and other Asian partners.
For now, the Power of Siberia 2 memorandum underscores both the potential for closer Sino-Russian energy cooperation and the limits of what a single pipeline can deliver. Without agreed pricing, financing and a binding commercial contract, the announcement is likely to remain a high-profile indicator of political alignment rather than an immediate solution to Russia’s loss of European gas revenues.