In Beijing, during a meeting of Russian, Chinese and Mongolian leaders, a legally binding memorandum was signed on the construction of the Power of Siberia 2 (PS2) gas pipeline to China and the Soyuz—Vostok transit gas pipeline across Mongolia.
Gazprom head Alexey Miller told reporters: “On the basis of the public statement that was made by the leaders of the three countries - Russia, China and Mongolia - a legally binding memorandum was signed today on the construction of the Power of Siberia 2 gas pipeline and the Soyuz-Vostok transit gas pipeline through the territory of Mongolia.”
The 30-year project envisages the annual supply of 50 billion cubic meters of gas from Russia to China via Mongolia. The pipeline's total length will be some 7,000 kilometers, with almost 3,000 kilometers of it running through Russian territory.
Furthermore, the visit saw commercial agreements signed between Gazprom and the China National Petroleum Corporation (CNPC). Under the arrangements, gas delivery volumes via the Power of Siberia pipeline are going to grow from 38 to 44 billion cubic meters per year. Also, it is planned to boost natural gas supplies under the Far Eastern route project — from an annual 10 to 12 billion cubic meters.
Alexey Miller emphasized that Gazprom and CNPC have signed a new memorandum on strategic cooperation, which marks the next phase of the partners' work on new projects: "In the near future, the parties will have to finalize a number of the project's parameters and specify the funding volumes. All matters pertaining to the commercial terms of supply will be resolved during this current period. We will report on the commercial terms separately."
Responding to a question about the currency of payments, the Gazprom head stated: "I can disclose the currencies used for current payments — 50 percent in Russian rubles and 50 percent in Chinese yuan."
Supplies of Russian gas to China via the Power of Siberia pipeline commenced in December 2019 under a long-term contract between Gazprom and CNPC. Since 2020, the supply volumes have consistently exceeded contractual obligations. In 2024, over 31 billion cubic meters of gas were exported via the pipeline. In the first eight months of this year, Gazprom increased its gas supplies to China by 28 percent. Deliveries via the Power of Siberia are set to reach the planned annual level of 38 billion cubic meters this year.
The memorandum on "CC2" removes the issue of choosing the pipe’s route off the table. It will run across Mongolia. And yet, the parties also considered one through the territory of Kazakhstan. Back in spring, before Chinese Leader Xi Jinping's visit to Moscow on May 9, Zhang Hanhui, Ambassador Extraordinary and Plenipotentiary of the People's Republic of China to Russia, raised the CC2 project geography topic in an interview, noting that Russian gas supplies route to China through Kazakhstan could be too expensive. And the focus should be on the projected gas pipeline to run through Western and Eastern Siberia across Mongolia to China.
In June, The Wall Street Journal (WSJ) reported that Beijing had begun to show increased interest in Power of Siberia 2 due to growing instability in the Middle East. A potential major conflict in the region threatens the fulfillment of large liquefied natural gas (LNG) supply contracts previously signed by Chinese conglomerates.
Once all the projects (Power of Siberia, Power of Siberia 2, and the Far Eastern Route) are commissioned and reach their nameplate capacity, the annual volume of pipeline gas supplies from Russia to China will significantly exceed the target benchmark of 100 billion cubic meters.
However, the anticipated timelines for the start of construction and gas deliveries, as well as the schedule for ramping up the system to its design capacity and the pricing formula, have not yet been disclosed. Although regarding the latter, Alexey Miller clearly stated that China would be able to buy gas cheaper than Europe. Europe, incidentally, keeps persistently promoting its course towards a complete rejection of Russian energy carriers. But in reality, things are quite different: judging by current data from the European Network of Transmission System Operators for Gas (ENTSOG), RIA Novosti calculated that gas exports from Russia to Europe via TurkStream from January to August 2025 increased by almost 7 percent year-on-year.
