Putin and Xi back Power of Siberia 2 but leave price and timetable unsettled

Putin and Xi back Power of Siberia 2 but leave price and timetable unsettled A 50-bcm pipeline memorandum from the Beijing summit hands China leverage over pricing, while the supply guarantees still hang on terms Moscow and Beijing have not agreed. Russia and China left their Beijing summit on Wednesday (2026-05-20) with more than 20 signed agreements and a stated "general understanding" on the Power of Siberia 2 gas pipeline, but no final price and no construction timetable.^3,1 Kremlin foreign policy aide Yuri Ushakov had said on Tuesday (2026-05-19) that the project would be discussed "in great detail," and Vladimir Putin and Xi Jinping spent hours together before the banquet.^4,6 What they did not produce was the one number that decides whether the pipeline gets built. The gap is the story. China reportedly wants pricing near Russia's domestic rate of roughly $120-130 per 1,000 cubic metres, while Moscow is pushing for terms closer to Power of Siberia 1, which analysts estimate would more than double that figure.² A memorandum that advances "early-stage" work, language echoed in China's 15th five-year plan released in March, is not a binding offtake contract.¹ For a project of this scale, the distance between a memorandum and a signed price is measured in years. Power of Siberia 2 is designed to carry 50 billion cubic metres a year from Russia's Arctic Yamal fields to China via Mongolia, a 2,600-kilometre line.^1,2 That matters for the structure of global gas because it is gas Russia can no longer easily sell west. After the loss of European pipeline demand, Moscow has limited alternative buyers at scale, and that weakens its hand on price even as it signs grand memoranda. The existing connection shows what the relationship already delivers. Power of Siberia 1 sent about 38 bcm to China in 2025, and at their September meeting Putin and Xi agreed to lift its capacity toward 44 bcm a year.^1,4 China is not short of pipeline gas. Three lines from Turkmenistan and Uzbekistan through Kazakhstan feed more than 40 bcm a year into Xinjiang, the 793-kilometre Myanmar-China line adds up to 12 bcm, and a separate 10-bcm Sakhalin project with Russia is under construction.¹ China's total pipeline gas imports reached 59.4 million tons in 2025.¹ Set against that supply, Beijing has little reason to rush. Every existing route and the prospect of more LNG give China the option to wait for Russia to move toward its number. The Iran war that has rattled energy markets and revived attention to the pipeline raises the strategic case for overland gas, but it does not change the arithmetic of who needs the deal more.^5,4 China's appetite for Russian hydrocarbons is not in doubt. Imports of Russian oil jumped 35% year over year in the first quarter, according to official customs data, a reminder that the commercial relationship keeps deepening even where the marquee gas project stalls.⁴ The oil flows are real and contracted. The new gas line remains a letter of intent. For European gas, the read-through is indirect but worth holding. Every cubic metre Russia eventually routes east is a cubic metre that does not return to compete for European demand, which over a long horizon supports the case that European hubs have permanently lost cheap Russian pipeline supply. ICE Endex TTF front-month settled around €42 a megawatt-hour into the weekend, a level that reflects a market sourcing molecules from LNG rather than from Yamal. None of that shifts on a memorandum. The bearish signal weight in this story sits on Russian supply and crude, not on European gas. A pipeline that adds 50 bcm of contracted Chinese offtake, if it is ever built, firms Russia's export outlook and weighs on the marginal barrel and cubic metre it must otherwise discount. The contrarian pull comes from Asian LNG: a JKM spot signal leans bullish on supply concerns, the channel through which any delay in overland gas keeps China leaning on seaborne cargoes.² The signal to watch is the price line, not the political theatre. Until Moscow and Beijing publish an agreed figure per 1,000 cubic metres and a construction start date, Power of Siberia 2 is a statement of intent that has been made, in varying forms, for more than a decade. The September capacity bump on Power of Siberia 1 was concrete and quantified; this summit's gas headline was neither.^1,2