China's Ding Pushes Russia Energy Cooperation as Pipeline Pricing Gap Persists
Beijing's call for closer Russia-China energy ties comes weeks after talks on the 50 bcm Power of Siberia 2 pipeline hit a reported deadlock over price.
Chinese Vice-Premier Ding Xuexiang called on Friday (2026-08-28) for China and Russia to deepen cooperation in energy and artificial intelligence, urging both sides to explore how the sectors could "empower each other," China Daily reported on Thursday (2026-09-03). The remarks came roughly six weeks after the Wall Street Journal reported that negotiations over Power of Siberia 2 had hit a complete deadlock following more than a decade of talks.7,6
The pipeline that remains stuck is substantial. Power of Siberia 2 would run 2,600 kilometres from Russia's Arctic Yamal fields through Mongolia to China, carrying 50 billion cubic metres of gas annually — a volume that would almost match China's entire existing Central Asian pipeline supply, which totals more than 40 bcm per year from Turkmenistan and Uzbekistan.1
Price is the obstacle. China reportedly wants terms at Russia's domestic rate of around $120-130 per 1,000 cubic metres. Moscow is seeking terms comparable to those governing Power of Siberia 1, which analysts estimate would more than double that figure. Neither side has publicly signalled movement on that spread.3
The pricing dispute did not prevent a burst of diplomatic activity in May. During Vladimir Putin's visit to Beijing, Gazprom CEO Alexei Miller confirmed the two sides had signed a legally binding memorandum to advance construction of the pipeline and pledged to expand Power of Siberia 1 capacity from 38 billion cubic metres delivered last year to 44 bcm annually. Gazprom said 22 documents were signed during the summit. But Russia acknowledged that key commercial details and a timetable for the larger pipeline were still unresolved.5,4,3,1
China's own planning documents hedged accordingly. The 15th five-year plan, released in March, referenced only "early-stage" work on Power of Siberia 2 — phrasing that offers political cover without committing to construction timelines or capital expenditure.1
Beijing's existing pipeline diversification gives it room to wait. Three pipelines from Turkmenistan and Uzbekistan, running through Kazakhstan into Xinjiang, supply more than 40 bcm annually. The 793-kilometre Myanmar-China pipeline, operational since 2013, was designed to carry 12 bcm per year. Russia and China are also building a separate 10 bcm pipeline from Sakhalin. China's total pipeline gas imports reached 59.4 million tons in 2025. That infrastructure base reduces the urgency of any single new supply agreement.1
Asian LNG prices reinforce that flexibility. JKM front-month was trading at $24.09 per MMBtu on Friday (2026-09-04), keeping seaborne imports competitive with pipeline gas for buyers who can access regasification capacity. So long as LNG remains a viable alternative, Beijing has limited pressure to concede on Russian pipeline pricing. [LIVE PRICES]
Russia's position is tighter. Gazprom's European revenues collapsed after 2022, and Power of Siberia 1, while growing, cannot absorb what Russia once sold westward. Vita Spivak at Control Risks has observed that China will need substantially more gas as coal use eases over coming years — the demand signal Moscow is banking on. But that growth plays out over a decade, giving Beijing no particular reason to settle on Moscow's price terms in the near term.2
Ding's call for AI-energy cooperation adds political momentum to a negotiation that has been commercially stalled for months. The specific price at which either side moves, and whether China's five-year plan "early-stage" language gets a construction start date attached to it, remain the concrete benchmarks against which any future diplomatic overture should be measured.7,1