Reuters: Putin Has Problems With Xi Jinping
- 7.10.2025, 15:26
The parties have not agreed on the price of gas for Power of Siberia-2.
Russian-Chinese talks on the construction of the new Power of Siberia-2 pipeline, which Vladimir Putin and Gazprom claimed had culminated in "legally binding" agreements, did not in fact result in an agreement on key parameters of the multi-billion-dollar project.
According to Reuters, Putin failed to reach an agreement with Si Jinping on the price of the new supplies, which are to total 50 billion cubic meters a year, during a visit to China in September. The investment terms of the project and the terms for the start of gas pumping have not been agreed upon either.
Even if the deal can be concluded next year, the construction of the pipeline will take at least 5 years, and it will take the same amount of time to bring it to its design capacity, sources familiar with the situation told Reuter's. According to one of them, Gazprom does not expect Power of Siberia-2 to reach the planned volumes earlier than 2034-35, if deliveries start in 2031.
Now Gazprom pumps 38 billion cubic meters of gas to China annually - through the Power of Siberia-1 pipeline launched in 2019. From 2027, deliveries via the Far Eastern route will also begin in the amount of 12 billion cubic meters annually.
On average, according to the Ministry of Economic Development, Gazprom's gas this year costs China $248 per thousand cubic meters. That's 38% less than what Russia's other far-abroad customers pay ($402 per thousand cubic meters). Next year, according to the draft budget material, the price of gas for China will drop to $240 and will be 37% lower than for other Gazprom customers ($380).
Exports to China compensate Russia for only a fifth of its former supplies to the European Union, which have collapsed by a factor of 12 since the start of the war. In the first half of 2025, Gazprom supplied only 8.8 billion cubic meters to the European market, and by the end of the year, supplies will barely exceed 16 billion cubic meters - the maximum capacity of the European branch of Turkish Stream. Russia has not pumped so little gas to Europe since the early 1970s. For comparison: in 1975 it was 19.3 billion cubic meters, and in 1980, after the "gas in exchange for pipes" deal and the conclusion of a large contract with Germany, it was already 54.8 billion cubic meters. Before the war with Ukraine, at its peak, Gazprom's exports to Europe reached 200 billion cubic meters.