Power of Siberia 2 Cost Tops $1 Billion as Russia-China Pipeline Talks Deadlock
A government official told Asharq Bloomberg the project would cost more than $1 billion, as a decade of Russia-China pricing talks has produced no deal.
The Power of Siberia 2 natural gas pipeline would cost more than $1 billion to construct, a government official told Asharq Bloomberg on condition of anonymity. That figure arrived after the Wall Street Journal reported on July 13 (2026) that more than a decade of Russia-China negotiations over the project had broken down entirely, with both sides unable to resolve fundamental differences on pricing.7
Russian President Vladimir Putin had travelled to Beijing on Wednesday (2026-05-20) to revive the talks in person. Kremlin foreign policy aide Yuri Ushakov said on Tuesday (2026-05-19) that the project would be discussed in detail, Bloomberg reported. The summit produced no announced agreement, and the Journal's deadlock report arrived less than two months later.5,1,4
The scale of what is being negotiated is considerable. AFP reported the proposed 2,600-kilometre route would run from the Yamal peninsula in northern Siberia, with capacity to carry around 50 billion cubic metres of gas per year. At China's estimated 2025 total consumption, that represents roughly 12 percent of the country's annual demand, enough to make pricing terms commercially defining for both sides.2
The project differs from the existing Power of Siberia pipeline, which Gazprom launched in 2019. That line has capacity for around 38 billion cubic metres of gas annually, drawing from eastern Siberian fields for delivery to northeastern China. Power of Siberia 2 would take a different route, tapping Yamal reserves in northwestern Russia, with the proposed path running through Russia's Altai Republic.2,3,6
Pricing is where the decade of talks has come undone. China reportedly sought terms matching Russia's domestic rate of around $120 to $130 per 1,000 cubic metres, while Moscow pushed for conditions closer to the original Power of Siberia contract terms, CNBC reported. That gap did not close at the May (2026) summit. It was still unresolved when the Journal reported the full deadlock in July (2026).4,5,7
The project's record of missed timelines precedes the current impasse. Al Jazeera reported that a 2010 agreement between Gazprom and CNPC had envisaged 30 billion cubic metres of supply per year for 30 years, with exports originally expected to begin in late 2015. That schedule slipped by years. Power of Siberia came on stream in 2019, and Power of Siberia 2 is now carrying the same pattern of declared targets and unresolved commercial terms.3,6
But the route itself adds complications beyond price. The pipeline's proposed path through Russia's Altai Republic would bisect the Ukok Plateau, a remote wilderness that Al Jazeera described as holding Stone Age archaeological significance. Gazprom has stated it possesses sufficient resources and capacity to proceed, while the full commercial and environmental terms remain unsettled.3
Asian LNG prices give China limited incentive to accelerate. JKM was quoted at $21.26 per MMBtu on Tuesday (2026-08-11), keeping competing supply accessible to Chinese buyers and reducing pressure to accept Russian pipeline terms above Beijing's preferred pricing floor. [live prices]
The pricing gap remains the variable that governs any change in the project's status. China's reported $120 to $130 per 1,000 cubic metres target sits well below what Moscow has been willing to accept, and Russia has not signalled movement toward domestic pricing levels. With LNG competition intact and talks in deadlock as of mid-July (2026), the $1 billion-plus cost estimate is attached to a project with no agreed commercial framework and no confirmed start date.4,5,7