Power of Siberia 2 Memorandum Points Russian Gas at China, Caps the LNG Buyers Are Chasing

Power of Siberia 2 Memorandum Points Russian Gas at China, Caps the LNG Buyers Are Chasing A 50 bcm pipeline memorandum signed in Beijing redirects stranded Russian gas eastward, narrowing the open-ended Chinese LNG demand that trading houses are buying into. Moscow said on Tuesday (2026-05-19) it had signed a memorandum to build the Power of Siberia 2 pipeline, a 2,600-kilometre line to carry up to 50 billion cubic metres of gas a year from Russia's Yamal Peninsula to northern China via eastern routes, according to CSIS.^4,2 That matters because it points the largest pool of stranded Russian gas toward China rather than back toward Europe. After Russia suspended exports to certain EU countries in April 2022, Moscow accelerated talks with China to replace the volumes it lost, and China is the only buyer large enough to absorb them.³ The terms remain thin. Russia's state gas company says a deal exists, but AP reported many unanswered questions about pricing, financing and timing, with no published commercial details.⁶ Analysts read the May 2026 signing as politics as much as commerce. The announcement was, in AP's account, primarily a chance for Russia and China to underline a closer relationship and for Beijing to snub seaborne US liquefied natural gas.⁶ That tempers any read that gas will start flowing soon. For LNG, the calculation runs through China's import appetite. China has become the world's largest LNG market, displacing Japan after decades in which Japanese utilities and trading houses underpinned global supply growth, according to Wood Mackenzie.¹ Trading houses chasing new demand to feed power-hungry AI data centres are buying into a market whose centre of gravity has already shifted toward China. Pipeline gas and seaborne cargoes compete for the same Chinese burner tip. If Power of Siberia 2 eventually delivers 50 bcm a year of cheaper overland Russian gas, it caps how much price-sensitive LNG China needs to import, which matters for anyone signing long-term offtake on the assumption of open-ended Chinese demand.^4,1 The demand numbers still favour the buyers, for now. Wood Mackenzie data showed Chinese LNG imports rising 30% over the prior year, with ship-tracking pointing to more than 7 Mt imported in a single month, up 35% on the year, while gas-fired power generation jumped 14%.¹ Those figures describe a market absorbing every molecule it can land. But the pipeline changes the ceiling, not the floor. A line that does not break ground for years offers China leverage in price talks without committing it to anything, and the absence of a binding contract leaves the 50 bcm figure as an aspiration rather than a supply forecast.^6,4 That eastward pull is the strategic core of the deal. CSIS called the agreement a communication and diplomatic coup that could firmly anchor Russian gas flows eastward, reasserting the strategic weight of Russian resources if the project materialises.⁴ The conditional matters as much as the claim. The Columbia and Parliament Magazine accounts frame Power of Siberia 2 as the biggest piece yet of Moscow's long-promised pivot to the east, the largest economic project in that pivot so far.^5,2 For European balances the read-through is quiet but real: gas Moscow once aimed west is now contractually pointed at China, narrowing any future scenario in which Russian pipeline volumes return to the continent.³ Signals around the affected European hubs skewed bearish on the prospect of looser global gas, with one supply-driven read pointing the other way.² The split reflects genuine uncertainty about whether eastbound Russian gas tightens or loosens the global balance. Watch for commercial substance. Until the two sides publish a price, a financing structure and a construction start date, Power of Siberia 2 remains a memorandum, and the 50 bcm stays a number on a press release rather than a volume on a balance sheet.^6,4