While the agreement to build the second pipeline, the Power of Siberia-2, is still stalled due to China's demands on the gas purchase price
The Power of Siberia pipeline has reached its maximum design capacity of 38 billion cubic meters of gas per year as of Dec. 1, 2024, one month ahead of schedule, Gazprom said.
The company secured in advance an increase in Russian natural gas exports to China, in accordance with the Chinese side's request and the agreement signed with CNPC on the “eastern” route.
According to TASS, Gazprom and CNPC had initially planned to bring the pipeline up to its design capacity starting Jan. 1, 2025, but daily gas deliveries reached the contracted maximum level a month earlier than planned.
Alexey Miller, chairman of the board of directors of PJSC Gazprom, stressed the important role of Russian gas in ensuring a stable energy supply to the Chinese economy. Miller also pointed out that in five years Gazprom has established itself as a reliable pipeline supplier, providing the necessary volumes even in excess of contractual obligations.
Power of Siberia is the largest gas transportation system in eastern Russia. The first deliveries began in December 2019 under a contract between Gazprom and CNPC for a period of 30 years. The total value of the contract is $400 billion and the total supply will exceed 1 trillion cubic meters of gas.
According to Deputy Prime Minister of the Russian Federation Alexander Novak, in 2023 gas supplies to China from the Power of Siberia will increase 1.5 times to 22.7 billion cubic meters. Gazprom's Deputy Chairman of the Board of Directors Vitaly Markelov said that in 2024 the volume of supplies of 1 billion cubic meters will exceed the planned contractual obligations.
The dynamics of gas supplies through the Power of Siberia shows stable growth: in 2020, the volume amounted to 4.1 billion cubic meters, in 2021 - 10.39 billion cubic meters, in 2022 - 15.4 billion cubic meters. According to Alexander Novak's forecast, in 2024, the export volume may reach 30 billion cubic meters.
Power of Siberia-2 construction deal stalled due to Chinese price demands
The Russia-China agreement to build the pipeline has stalled due to price demands. Beijing The Power of Siberia-2 project would provide a “lifeline,” the FT wrote in early June 2024.
According to sources familiar with the matter, the pipeline deal was one of Russian President Vladimir Putin's main questions to Chinese leader Xi Jinping during their May 2024 meeting.
Construction of "Power of Siberia-2" may be postponed - Prime Minister of Mongolia
Construction of a mega gas pipeline connecting Russia's western gas fields with China (Power of Siberia-2) could be delayed, Mongolia's prime minister warned in January 2024.
Moscow and Beijing have not yet agreed on the details of the grandiose infrastructure project.
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