Russia to boost gas supplies to China, signs up new pipeline

Russia agreed to supply additional volumes of natural gas to China and signed a memorandum on building the vast Power of Siberia 2 pipeline but has yet to agree on pricing for one of the world's most expensive gas projects, Gazprom said on Tuesday.

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The "no limits" partnership between China, the world's biggest consumer of energy, and Russia, the world's biggest producer of natural resources, has strengthened since the West imposed sanctions to punish Russia for the war in Ukraine.

Since losing a lucrative chunk of the European gas market, Russia has pivoted towards China, and Gazprom has sought an agreement for years on building the Power of Siberia 2 pipeline, capable of delivering 50 billion cubic metres (bcm) per year to China through Mongolia from the Arctic gas fields of Yamal.

Alexei Miller, the CEO of Gazprom, told Russian news agencies that an agreement had been reached to increase supplies via the existing Power of Siberia pipeline, which runs from Eastern Siberia to China, to 44 billion cubic metres (bcm) a year from 38 bcm.

"Today, a legally binding memorandum was signed on the construction of the Power of Siberia 2 gas pipeline and the Soyuz Vostok transit gas pipeline through Mongolia," Miller said. Soyuz Vostok is designed to be the portion of the Power of Siberia 2 pipeline, traversing Mongolia.