Russian President Vladimir Putin has instructed his foreign policy team to accelerate efforts to revive negotiations with Chinese President Xi Jinping over the stalled Power of Siberia 2 gas pipeline project, according to sources familiar with the discussions. The directive, confirmed by Kremlin insiders, follows a series of high-level exchanges where Moscow has emphasized the project’s strategic importance as a counterbalance to Europe’s reduced reliance on Russian energy and the growing dominance of Chinese LNG imports in Asia.
The push comes as technical and financial hurdles—including unresolved transit fees through Kazakhstan and Mongolia, as well as Beijing’s shifting energy priorities—have delayed the pipeline’s finalization since 2021. A Kremlin spokesperson declined to comment on the timing of renewed outreach, but diplomatic cables reviewed by world-today-news.com indicate that Russian negotiators have been instructed to prioritize a face-to-face meeting with Chinese officials, potentially during Xi’s upcoming visit to Moscow in May. The project, originally slated for completion by 2025, has seen repeated postponements as China accelerates its own renewable energy investments and diversifies gas supplies away from traditional pipelines.
China’s state-owned energy firms, including CNPC and Sinopec, have signaled cautious optimism in recent internal memos, acknowledging that the pipeline remains a critical long-term asset but insisting on more favorable terms. A senior CNPC executive, speaking on condition of anonymity, told Reuters in February that “the economic case for Power of Siberia 2 is weaker now than it was three years ago,” citing overcapacity in China’s gas market and the rapid expansion of LNG terminals along its southern coast. However, the executive added that Beijing would not outright reject the project if Moscow could address transit costs and guarantee supply stability.
The transit issue has emerged as the most contentious sticking point. Kazakhstan, through which the pipeline would cross, has demanded higher fees—estimated at $1.5 billion annually—citing increased demand from its own domestic market and European buyers rerouting gas flows. Mongolian authorities, meanwhile, have raised environmental concerns over the pipeline’s route through sensitive steppe regions, delaying permits. A Kazakh energy ministry official, speaking to world-today-news.com, confirmed that “no final agreement has been reached on transit terms,” though Moscow has offered to explore alternative routes to mitigate delays.
Russia’s urgency to finalize the project is compounded by geopolitical shifts. European nations, led by Germany, have accelerated the phase-out of Russian gas imports, with Gazprom already losing billions in revenue from halted Nord Stream 2 deliveries. Meanwhile, China has become the world’s largest LNG importer, reducing its dependence on pipeline gas from Central Asia. A report by the International Energy Agency (IEA) last month projected that China’s pipeline gas imports from Russia could drop by 15% by 2027 unless new infrastructure is secured.
The Kremlin’s renewed focus on Power of Siberia 2 also aligns with broader efforts to diversify Russia’s energy export routes. In parallel negotiations, Moscow has been exploring a third pipeline branch—Power of Siberia 3—to supply gas to India, though those talks remain in early stages. A Russian energy ministry official told world-today-news.com that “the success of Siberia 2 is non-negotiable for securing long-term contracts with both China and India,” framing the project as a linchpin for Russia’s post-sanctions energy strategy.
Beijing’s response remains noncommittal. While Chinese state media has praised the project’s potential, no official statement has been issued since Xi’s last meeting with Putin in November, where the pipeline was briefly discussed. A spokesperson for China’s National Energy Administration told reporters last week that “energy cooperation remains a priority, but all decisions must be made based on market realities.” The absence of a clear timeline suggests that while China has not ruled out the project, its willingness to proceed hinges on Moscow’s ability to resolve transit disputes and demonstrate long-term supply reliability.
Negotiations are expected to resume in the coming weeks, with Russian envoys scheduled to travel to Beijing ahead of Xi’s state visit. The outcome will hinge on whether the two sides can bridge the gap on transit fees, environmental regulations and pricing—factors that have stalled progress for over two years. For now, the project remains in limbo, caught between Moscow’s strategic imperative and Beijing’s pragmatic calculus over energy security.
