Russia Expands Gas Flows To China, Signs Landmark Pipeline Deal
Gazprom will increase exports through the existing Power of Siberia line from 38 to 44 bcm annually, while a legally binding memorandum was signed for the Power of Siberia 2 pipeline via Mongolia with capacity of 50 bcm per year.
Russia has agreed to boost natural gas supplies to China and move forward with the long-delayed Power of Siberia 2 pipeline, a project that underscores Moscow’s energy pivot eastward as Europe phases out Russian imports. President Vladimir Putin announced the agreement in Beijing alongside Xi Jinping and Mongolia’s president, hailing it as a strategic breakthrough in Eurasian energy cooperation.
Expansion Of Power Of Siberia
Gazprom’s CEO Alexei Miller confirmed flows through the Power of Siberia pipeline will rise to 44 bcm per year, up from 38 bcm. The line, operational since 2019 under a $400 billion, 30-year supply contract, has become central to Russia’s redirection of energy exports. In 2024, shipments totaled 31 bcm, with full design capacity expected this year. The new Power of Siberia 2 link, running through Mongolia, is expected to carry an additional 50 bcm annually—volumes comparable to Europe’s Nord Stream 1 before its closure.
A Price Shift Toward Asia
Prices for China deliveries will be lower than those once charged to Europe, reflecting the longer distances and massive infrastructure investment required. Industry analysts describe the project as the largest, most capital-intensive gas infrastructure ever attempted. Final construction costs and financing details remain undisclosed, though both sides stressed that negotiations will continue on pricing formulas.
Strategic Realignment
- Pre-war exports to Europe: 177 bcm annually
- Current EU share of Russian gas: 18% of imports
- EU target: full phase-out of Russian gas by 2027
- China’s role: top energy buyer of Russian oil, LNG, coal, and pipeline gas
- Impact: Beijing becomes Moscow’s economic anchor amid Western sanctions
Sanctions And Resilience
Analysts note that sanctions have reached a plateau in effectiveness. Russia’s revenues remain under pressure, but re-routed flows to China and India, coupled with shadow shipping of crude, have preserved financial stability. Observers say the Power of Siberia 2 agreement marks a symbolic turning point: Moscow has demonstrated it can forge megadeals outside Western systems, further embedding the China-Russia partnership.
Geopolitical Implications
The timing of the announcement—coinciding with the Shanghai Cooperation Organization summit in Beijing—was deliberate. Xi Jinping framed the pact as part of a broader Eurasian vision, while Putin portrayed it as proof Russia is not isolated. The deal reflects how energy diplomacy now serves as both an economic and geopolitical instrument, reinforcing a Sino-Russian axis designed to counter Western leverage in global markets.