The Financial Times reported on Sunday that Mongolian Prime Minister Luvsannamsrai Oyun-Erdene stated the new pipeline (Power of Siberia-2) that Russia plans to extend to China for gas delivery may be delayed, contrary to expectations for work to begin this year. Russia is in talks to establish the new pipeline to transport 50 billion cubic meters of gas annually from northern Russia to China through Mongolia, which is roughly equivalent to the capacity of the Nord Stream 1 pipeline, currently inactive after damage in 2022.
Oyun-Erdene told the newspaper that China and Russia have not yet agreed on key details of the massive project, adding that unprecedented global gas prices over the past two years have complicated discussions. Russian company Gazprom, which will operate the new pipeline, aims to begin delivering gas via the line by 2030. However, an agreement on key points, including pricing, remains elusive.
Oyun-Erdene mentioned to the Financial Times, "Both sides still need more time to conduct detailed research and economic studies. The Chinese and Russian sides are still doing calculations and estimations and working to determine the economic benefits." Gazprom and the Kremlin did not respond to a Reuters request for comment, and Reuters has yet to reach the Chinese foreign ministry.
Russia is increasing its supplies to China to compensate for the loss of most of its gas sales to Europe since the invasion of Ukraine nearly two years ago, prompting Western countries to impose sanctions on Moscow and reduce their reliance on Russian energy. Last year, Russian Deputy Prime Minister Viktoria Abramchenko told the TASS news agency that construction of the section of the gas pipeline through Mongolia to China could begin in the first quarter or the first half of 2024.