The beginning of construction on Russia’s mega-pipeline, which would see the country’s western gas fields connected to China, is expected to face delays, Mongolia’s Prime Minister Luvsannamsrain Oyun-Erdene has warned.
The Power of Siberia 2 pipeline, due to be operated by Russian oil and gas company Gazprom, has been a priority for Russia for more than a decade. However, Europe’s sanctioning of Russian energy products after its invasion of Ukraine has elevated its importance to Moscow to new heights.
Oyun-Erdene had previously told the Financial Times (FT) that he expected construction of the 3,550km pipeline, which will stretch 950km through Mongolian territory, to begin in 2024. When asked by reporters whether Gazprom and China National Petroleum, the two companies involved in the project, will stick to that timetable, he said that Russia and China are yet to agree on critical details of the mammoth infrastructure project.
“Those two sides [Russia and China] still need more time to do more detailed research on the economic studies,” Oyun-Erdene said in an interview with the FT, adding that record global gas prices during the past two years had complicated negotiations. “The Chinese and Russian sides are still doing the calculations and estimations and they are working on the economic benefits.”
Russia’s Deputy Prime Minister, Alexander Novak, said on Thursday that timings for construction will be finalised after Chinese partners sign binding agreements. In September last year, Russia claimed the route for the Power of Siberia 2 pipeline had been finalised.
China already receives gas from Russia through the original Power of Siberia pipeline. It was built in 2019 but is not expected to reach full capacity until 2025. Last year, the interconnector carried approximately 23 billion cubic metres (bcm) of gas to China; this is expected to rise to around 38bcm next year.
The Power of Siberia 2 pipeline could bring an additional 50bcm of gas from fields in western Siberia to China. Prior to Russia’s invasion of Ukraine, the Yamal peninsula had supplied gas to Europe.