Power of Siberia-2: Mongolia casts doubts on Russia’s new gas pipeline to China

In a surprising turn of events Mongolia’s Prime Minister L. Oyun-Erdene has cast doubt on the scheduled commencement of construction for Russia’s ambitious Power of Siberia-2 gas pipeline to China, initially slated to kick off this year.

Russia, in its bid to fortify energy ties with China, has engaged in talks to establish a groundbreaking pipeline that would ferry a colossal 50 billion cubic meters of gas annually from the northern reaches of Russia to China, traversing the vast expanse of Mongolia.

This volume is nearly tantamount to the capacity of the now-idle Nord Stream 1 pipeline beneath the Baltic Sea, a victim of damage sustained in 2022.

Interesting revelations from Prime Minister Oyun-Erdene suggest that the two powerhouse nations, China and Russia, are yet to see eye to eye on pivotal aspects of this colossal endeavor.

Key details remain unresolved, with the mammoth project hampered by the intricate web of negotiations.

The Prime Minister cited the unprecedented surge in global gas prices over the past two years as a complicating factor in these intricate talks.

The operator of the Power of Siberia-2, Gazprom, has publicly expressed its ambition to commence gas deliveries by the year 2030. However, the elusive agreement on critical issues, most notably pricing, continues to evade both parties involved.

Prime Minister Oyun-Erdene, in an exclusive interview with the Financial Times, disclosed, “Those two sides still need more time to do more detailed research on the economic studies.

“The Chinese and Russian sides are still doing the calculations and estimations, and they are working on the economic benefits.”

Despite numerous attempts, Gazprom and the Kremlin and China’s foreign ministry have yet to respond to media enquiries on the situation.

Russia, grappling with a significant decline in gas sales to Europe since its invasion of Ukraine nearly two years ago, is intensifying efforts to augment supplies to China. This strategic move aims to offset the repercussions of Western sanctions imposed on Moscow and reduce dependence on Russian energy.

Deputy Prime Minister Viktoria Abramchenko had previously indicated to state news agency TASS that construction of the Mongolian segment of the Russian gas link to China might commence in the first quarter or first half of 2024.

However, the recent statements from Prime Minister Oyun-Erdene have cast a shadow of uncertainty over the timeline of this pivotal energy infrastructure project.

As the world watches with bated breath, the fate of the Power of Siberia-2 gas pipeline hangs in the balance, with the intricate dance of geopolitics, economic calculations, and global energy dynamics playing a decisive role in shaping the future of this monumental collaboration between Russia, China, and Mongolia.

Power of Siberia-2: reshaping energy dynamics?

Russia’s Power of Siberia-2 gas pipeline is intended to reshape energy dynamics across the Eurasian continent.

The pipeline, a successor to the original Power of Siberia project, represents a strategic collaboration between Russia and China, solidifying their energy partnership.

The genesis of this colossal venture can be traced back to 2014, when the initial Power of Siberia pipeline was announced. Designed to deliver Russian natural gas to China, it marked a pivotal moment in Sino-Russian relations, fostering economic ties while diversifying energy supply routes.

The success of Power of Siberia laid the groundwork for its successor, Power of Siberia-2, which aims to further strengthen the energy alliance between Moscow and Beijing.

The mammoth infrastructure project is not without its fair share of controversies and challenges. Geopolitical tensions, environmental concerns, and intricate negotiations have all played a role in shaping the narrative of this ambitious endeavor.

Yet, as construction progresses, Power of Siberia-2 promises to be a game-changer, not only ensuring a stable energy supply for China but also enhancing Russia’s position as a key player in the global energy landscape.

The geopolitical chessboard is shifting, and the Power of Siberia-2 pipeline stands as a testament to the evolving dynamics of energy politics in the 21st century.

Main Image: By Kremlin.ru, CC BY 4.0, https://commons.wikimedia.org/w/index.php?curid=52139604

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