Power of Siberia 2 Stalls on Commercial Terms as China Maps Gas Supply to 2030
Beijing's 15th five-year plan commits to early-stage pipeline work, but contracted supply may fall 50 bcm short of what a post-coal 2030 demand picture would require.
China's National Development and Reform Commission and National Energy Administration published a development plan on Wednesday (2026-08-12) targeting a modern coal industry by 2030, with coal consumption expected to peak before the decade ends, according to a report via Xinhua. The plan places a ceiling on coal's role in the energy mix, pushing the country toward gas and renewables as substitutes. The pipeline capacity to deliver enough gas for that substitution is not yet in place.7
China's pipeline gas imports reached 59.4 million tons in 2025, fed by a network spanning Central Asia, Southeast Asia and the Russian far east. Three pipelines from Turkmenistan and Uzbekistan, transiting Kazakhstan into Xinjiang, supply more than 40 bcm annually. Power of Siberia 1 delivered 38 bcm from Russia last year. At their September 2025 meeting (2025-09-02), Putin and Xi agreed to raise that line's capacity to 44 bcm per year. Russia and China are also jointly constructing a pipeline from Russia's Sakhalin island, rated at 10 bcm. The 793-kilometre Myanmar-China Gas Pipeline, operational since 2013, was designed to carry 12 bcm annually.1,2,3
Power of Siberia 2 is the largest prospective addition to that network. The 2,600-kilometre system, originating in Russia's Arctic Yamal fields and transiting Mongolia, is designed to carry 50 bcm per year to China. At a summit in Beijing in May (2026-05-20), Putin and Xi reached what both governments described as a general understanding on the project. Key commercial terms and a construction schedule were still unresolved, according to reports at the time.1,2
Beijing has signalled intent without committing capital. China's 15th five-year plan, released in March, flagged early-stage work on Power of Siberia 2. That falls well short of a final investment decision, and no groundbreaking date has been set.1
The arithmetic underlines the difficulty. Power of Siberia 1 at its agreed ceiling of 44 bcm, plus more than 40 bcm from Central Asia and 10 bcm from Sakhalin, totals roughly 94 bcm in contracted pipeline gas before Myanmar. Power of Siberia 2 at its 50 bcm design capacity would add more than half as much again. With no commercial terms signed and no construction start date, those 50 bcm are not in China's confirmed supply picture for 2030.1,2
On the domestic supply side, Sinopec is pushing into ultra-deep shale in the Sichuan basin, targeting a one-third increase in China's national shale gas production, according to a report from June (2026-06-17). Sichuan's formations are technically demanding, with well costs that exceed the US shale benchmarks that originally defined the industry's cost curve, and the timeline for hitting the output target remains unclear.5
China is simultaneously lifting its renewable targets, planning to more than double solar and wind capacity by end-decade, as reported in August (2026-08-02). But 206 gigawatts of coal-fired capacity was still under construction in January, according to Carbon Brief — enough to ensure coal stays central to Chinese generation through most of the period when new gas supply would need to be flowing.6,4
Asian LNG spot prices frame the pipeline economics. JKM was trading at $22.94/MMBtu on Friday (2026-08-21), making contracted pipeline gas considerably cheaper than spot cargoes. That spread reinforces Beijing's preference for long-term piped supply and gives China room to hold out for better commercial terms in Power of Siberia 2 negotiations, since the spot market alternative remains costly.
Gazprom signed a memorandum of understanding on a new pipeline supply framework in September 2025 (2025-09-02), but the step from MOU to binding commercial agreement has not been taken. Until Power of Siberia 2 has a signed construction contract and a delivery schedule, China's 2030 gas transition plan has a 50 bcm gap on its supply side.3,1