Siberian Force 2: an agreement with China “before the end of the year”?

The Russian Deputy Prime Minister in charge of Energy spoke about the progress of negotiations between Gazprom and CNPC for the Siberian Force 2 pipeline project. Although the Russian president has declared that all agreements have been reached, the timetable for the project remains unclear and the Chinese side seems less enthusiastic.

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Russia’s Deputy Prime Minister in charge of energy, Alexander Novak, expressed hope on Thursday that Gazprom and its Chinese partner CNPC will sign an agreement for the realization of the Siberian Force 2 gas pipeline project by the end of the year. This project involves the construction of a 2,600-kilometer gas pipeline linking Siberia to China’s Xinjiang, with a capacity to transport 50 billion cubic meters of gas.

Russian President Vladimir Putin had declared on Tuesday alongside Xi Jinping that “all agreements had been reached” for this project. However, their final joint statement was limited to encouraging “research and consultation”. While Russia hopes that this project will allow it to largely redirect its gas deliveries to Asia, the Chinese side seems less enthusiastic. So far, Beijing has avoided any formal commitment on this project, whose timetable is still very unclear.

Despite this, Novak said that the final coordination of the terms of the contract between Gazprom and the Chinese company CNPC is underway. “We hope, we are confident that our company will reach an agreement by the end of the year and sign the contract,” he even assured, saying that “negotiations on (his) preparation” were “in the final stage.”

The Siberian Force 1 pipeline, commissioned in 2019, allowed Russia to export its natural gas primarily from Siberia to northeast China. With a transportation capacity of 38 billion cubic meters of gas per year from 2025, the Siberian Force 2 project would be a major new axis for Russian gas exports to Asia.

In a context of economic sanctions, this pipeline project is of particular importance for Russia, which is seeking to diversify its commercial partners. However, China seems more reluctant to formally commit to this project, the cost and economic benefits of which have yet to be specified.

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