September 2, 2025 | 08:51 pm
TEMPO.CO, Jakarta - Russia's state-owned company, Gazprom, has agreed to ramp up gas supplies to China through existing pipelines. The two countries have also signed a memorandum of understanding for the construction of the large Power of Siberia 2 pipeline, but at a lower price than that charged to European buyers, state news agencies report, as quoted by Asharq Al-Awsat on Tuesday, September 2, 2025.
Gazprom's CEO, Alexei Miller, told a Russian news agency on Tuesday that an agreement had been reached to increase supplies through the existing Power of Siberia pipeline, which stretches from Eastern Siberia to China, to 44 billion cubic meters (bcm) per year from 38 bcm.
"This will now be the largest, most ambitious and most capital-intensive project in the global gas industry,” Miller said, as quoted from The Moscow Times.
Russia and China have also agreed to the construction of the Power of Siberia 2 pipeline, which will be able to deliver 50 bcm per year to China through Mongolia from the Bovanenkovo and Kharasavey gas fields in Yamal, Miller said.
"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.
Miller said that the price of gas supplies to China is lower than that charged to European buyers, due to the long distance and challenging terrain where the pipeline must be built.
It is not yet clear who will build the pipeline, and the final investment has not been disclosed.
Following a meeting between President Vladimir Putin, President Xi Jinping of China, and President Ukhnaagiin Khurelsukh of Mongolia in Beijing, Miller stated that the price of gas delivered through Power of Siberia 2 will be negotiated separately.
The Chinese government news agency, Xinhua, also reported on Tuesday that the two heads of state had held in-depth discussions and signed more than 20 documents on bilateral cooperation in various fields, including energy.
This move comes amid Russia's efforts to expand its energy relationship with China, its largest trading partner, after losing significant market share in Europe due to sanctions following the conflict in Ukraine in 2022.
Last month, China was reported to be attempting to purchase more Russian gas through existing pipelines, as negotiations between the two countries failed to make significant progress in building new routes.
CHINA'S PURCHASES
The so-called "no limits" partnership between China, the world's largest energy consumer, and Russia, the world's largest producer of natural resources, has strengthened since the West imposed tough sanctions to punish Russia for the war in Ukraine.
China is now Russia's largest trading partner, the largest buyer of Russian crude oil and gas, the second-largest buyer of Russian coal, and the third-largest buyer of Russian LNG, according to the Kremlin.
Gazprom supplies natural gas to China through a 3,000 kilometer pipeline called Power of Siberia under a 30-year agreement worth $400 billion launched in late 2019.
In 2024, Russia's exports to China reached about 31 billion cubic meters (bcm). The supply is expected to reach the planned capacity of 38 bcm this year.
In February 2022, China also agreed to buy up to 10 billion cubic meters of gas per year until around 2026-2027 through a pipeline from Sakhalin Island in far eastern Russia.
Miller said the agreement has been reached to increase gas supplies through the Far Eastern route from 10 billion cubic meters to 12 billion cubic meters.
However, Russia's gas exports to China still represent a small part of the record 177 bcm it sends to Europe each year during the 2018-2019 period.
Russian gas now contributes only 18 percent of Europe's imports, down from 45 percent in 2021. While the bloc's oil imports from Russia have decreased to 3 percent from around 30 percent during that period. The European Union plans to completely stop importing energy from Russia by 2027.
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