Key points
- Russia and China signed a legally binding agreement for the Power of Siberia 2 pipeline, a major diplomatic win for Putin.
- The pipeline will transport up to 50 billion cubic meters of gas annually for 30 years, significantly boosting Russia’s gas exports to Asia.
- The deal signifies a deepening of ties between Russia and China amid Western sanctions on Russia.
- The agreement could be seen as a rebuke to the US, which has imposed tariffs on various countries, including India and China.
Russian President Vladimir Putin has achieved a significant diplomatic victory with the signing of a legally binding agreement for the Power of Siberia 2 pipeline, a massive project that will further entrench the energy relationship between Russia and China for decades to come. The announcement, made by Gazprom CEO Alexey Miller in Beijing, comes as Putin and Chinese President Xi Jinping met amidst growing geopolitical tensions.
Xi described Putin as an “old friend,” highlighting the strengthening bond between the two nations. This relationship has deepened considerably since the Russian invasion of Ukraine. The deal represents a significant shift in the global gas trade and marks a potential setback for the West.
The Power of Siberia 2 pipeline, which will traverse Mongolia, is projected to deliver up to 50 billion cubic meters of natural gas annually to China for 30 years.
This substantial increase in Russian gas exports to Asia will be crucial for Russia, given the significant reduction in its European gas exports due to Western sanctions imposed following the invasion of Ukraine. This deal is a clear indication of Russia’s pivot towards the East, aimed at compensating for the loss of the European market.
While specific financial details and a construction timeline remain undisclosed, the agreement is a major coup for Putin, particularly as it comes amidst ongoing discussions about further sanctions on Russia from the European Union.
Although China has yet to confirm the specifics of the deal officially, the signing itself indicates a considerable strengthening of bilateral ties and underscores China’s willingness to further integrate its energy infrastructure with Russia’s. The deal also stands as a potential rebuke of the US, which has imposed tariffs on various countries, including India and China, for their dealings with Russia.
The burgeoning relationship between Russia and China has been mutually beneficial, with bilateral trade reaching a record $245 billion in 2024 – a 68% increase from 2021.
The Power of Siberia 2 pipeline project, previously stalled for years, now represents a new benchmark for the strategic partnership between the two nations, signaling a potential reshaping of the global energy market.
