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China and Russia have signed an agreement to build the Power of Siberia 2 gas pipeline, deepening their commercial relationship in a week in which they set out an alternative to Donald Trump’s US-led global order.
Alexei Miller, the head of Gazprom, announced the deal, a “legally binding memorandum of construction”, after talks in Beijing on Tuesday involving Presidents Vladimir Putin and Xi Jinping.
The trilateral talks also involved Khurelsukh Ukhnaa, the leader of Mongolia, which will be a transit point for the pipeline, as cited by state newswire Interfax.
Once completed, the pipeline will allow the transit of 50bn cubic metres of gas a year from Russia through Mongolia, Miller added. Supplies under the new agreement will run for 30 years.
Moscow and Beijing also agreed to boost Russia’s exports to China via two existing routes, from 48bn to 56bn cubic metres a year.
These supplies total about half of the 230 bcm Russia used to send to Europe before the full-scale war in Ukraine in 2022.
The deals, which follow painstaking negotiations between the two countries, will sharply increase China’s energy purchases from its neighbour and help compensate for Russia’s loss of markets in Europe after it invaded Ukraine.
The PS2 project has been under discussion for years, but talks have dragged over pricing. The final terms remain unclear, and the format of the document, a memorandum, suggests the negotiations are ongoing. “We will provide details on commercial matters separately,” Miller told reporters on Tuesday.
Russia is the third-largest provider of liquefied natural gas to China after Australia and Qatar.
Putin stressed that his “close communication” with Xi “reflects the strategic nature of Russian-Chinese ties, which are at an unprecedentedly high level”, Russia’s Tass news agency reported.
The Chinese and Russian leaders will observe a military procession on Wednesday commemorating the 80th anniversary of Japan’s defeat in the second world war.
The meeting with Putin is part of a week of extensive diplomacy for China’s President Xi, who is hosting a score of world leaders for the Shanghai Cooperation Organization security conference in Tianjin as he aims to present Beijing as a reliable alternative to the US-led global order.
China did not immediately comment on the Power of Siberia 2 deal. After the meeting with the Russian and Mongolian presidents, state media quoted Xi as saying: “‘Hard connectivity’ should be a key direction, by actively promoting cross-border infrastructure and energy projects linking the three countries.”
