• China and Russia have signed a memorandum to build the Power of Siberia 2 gas pipeline.
• The pipeline aims to supply 50 billion cubic meters of gas annually from Russia to China.
• Unresolved pricing and cost-sharing issues may delay the project's progress.
• This project marks a significant step in energy diplomacy amidst US sanctions on Russia.
• Russia's gas supplies to China are expected to increase, reinforcing their energy partnership.

During a recent summit, China and Russia solidified their plans to construct the Power of Siberia 2 gas pipeline, which is anticipated to transport up to 50 billion cubic meters of gas annually through Mongolia. This agreement, hailed by both countries, was part of a broader strategy to deepen their energy ties amidst shifting global dynamics, particularly with the West, according to SCMP and India Times.

Gazprom CEO Alexei Miller confirmed that while the project has reached a legally binding memorandum, crucial details such as pricing remain to be negotiated. Russia has indicated a desire for gas prices akin to European rates, while China seeks lower domestic pricing, creating a significant barrier to the finalization of the deal, reports Channel News Asia and Al Jazeera.

This pipeline project is framed within the context of Russia’s pivot to Asia following diminished access to European markets due to sanctions. Despite the geopolitical challenges, the partnership aims to bolster mutual energy needs, especially given that trade between China and Russia reached $240 billion in 2023, according to Newsweek and Reuters.

Currently, increased flows of gas through the existing Power of Siberia pipeline are planned, with expectations to rise to 44 billion cubic meters annually, demonstrating Russia's aim to solidify its position as a key energy supplier to China. However, the strategic implications of this dependence on Russian energy raise concerns for Beijing about over-reliance, as highlighted by continued domestic production increases in China, as noted by India Times and Reuters.