Negotiations between Moscow and Beijing regarding the construction of the Power of Siberia 2 gas pipeline have reached a stalemate due to significant disagreements over gas pricing, according to the South China Morning Post, citing sources. The parties have been unable to make progress on agreeing to the supply costs.
According to the source, Russia wants to peg the gas price for Power of Siberia 2 to the supply price of the existing Power of Siberia 1 pipeline, which is approximately 250–260 US dollars per thousand cubic meters.
For comparison, the current average price of gas imported into China via Power of Siberia 1 is about 258 US dollars per thousand cubic meters. Before the full-scale war against Ukraine, Russia sold gas to Europe at a price exceeding 420 US dollars per thousand cubic meters.
Russia and China seek alternative routes
Another source, who also spoke on condition of anonymity, suggested that Gazprom and CNPC (China National Petroleum Corporation) are preparing to begin supplying Russian gas to China via the Far Eastern route. According to the source, the parties are discussing projects intended to expand and increase supply volumes along this route.
At the same time, work is underway to increase physical supply volumes through the existing Power of Siberia 1 pipeline. “The same is happening with Power of Siberia 1 — we see that they are also working on increasing physical supplies,” the second source noted.
Source: South China Morning Post
