Power of Siberia-2 pricing impasse survives Putin's Beijing summit
Russia and China reached a "general understanding" in May on the 50-bcm pipeline, but left the gas price and construction timetable that would make it viable unresolved.
Vladimir Putin arrived in Beijing on May 19 (2026-05-19) for a summit with Xi Jinping, and Russia's government said a "general understanding" had been reached on Power of Siberia-2. Key commercial terms, including the gas price and a construction timetable, both remained unresolved at the close of talks, according to Reuters and The Independent.1,2,5,6
The project is large enough to matter to both governments. Power of Siberia-2 is a 2,600-kilometre system designed to carry 50 billion cubic metres of natural gas per year from Russia's Arctic Yamal fields through Mongolia to China, a volume that would nearly double Russia's current gas deliveries to Beijing.2,4
Russia has a clear need for the throughput. Gazprom has lost access to its European export markets. Power of Siberia-1, the only large eastward pipe currently operating, shipped 38 bcm to China last year, and the two governments agreed at a September 2025 (2025-09) meeting to increase that pipeline's capacity to 44 bcm per year, a ceiling it will approach before any successor system could come online.2,5,7
China's position is more comfortable. Beijing already receives gas from multiple directions: three pipelines from Turkmenistan and Uzbekistan crossing Kazakhstan deliver over 40 bcm annually into Xinjiang, while a 793-kilometre line from Myanmar, operational since 2013, was designed for 12 bcm per year. A further 10-bcm link drawing from Russia's Pacific Sakhalin fields is under joint construction. China's total pipeline gas imports reached 59.4 million tons in 2025.2
That supply base gives Beijing patience. A May 2026 (2026-05-19) analysis from deluair.com described Power of Siberia-2 as hostage to a Gazprom-CNPC pricing impasse, noting that Russia's loss of European volumes has changed the negotiating dynamic and stripped Gazprom of the premiums it once earned from European buyers.7
China's 15th five-year plan, published in March 2026 (2026-03), committed to advancing "early-stage work" on Power of Siberia-2. The language endorses the concept without commercial urgency. It does not specify a timetable, contracted volumes or pricing framework, and Beijing has written the project into planning documents before without moving to a final investment decision.2
Vita Spivak of Control Risks has argued that the long-term case for the pipeline is real: China will need more gas as its coal phase-down advances, and Russia's Yamal reserves represent a proximate source of scale. But acknowledging future demand does not close a current pricing gap, and the May summit's "general understanding" is the kind of formulation that has preceded years of additional talks on bilateral infrastructure deals.3
Power of Siberia-1's history is instructive. The pipeline took years from initial framework to first gas flows, and it is now delivering 38 bcm against a contracted ramp to 44 bcm, evidence that China does absorb Russian gas when the price works. The unresolved piece for Power of Siberia-2 is what price that is: if Gazprom, now without European volumes to sustain it, cannot accept terms Beijing's buyers will pay, the project risks remaining a political commitment without a commercial foundation.2,5,7
Whether China's five-year plan reference to "early-stage work" translates into joint engineering studies — the step that typically precedes a final investment decision on a project of this scale — will indicate whether the May summit moved talks beyond the diplomatic register. The pricing impasse has not been resolved by either government's public statements, and the commercial logic of waiting falls more heavily on Moscow than on Beijing.2