Quick Summary
- 1In September 2025, Russian energy giant Gazprom and Chinese state-owned CNPC finalized a legally binding memorandum regarding the construction of the 'Power of Siberia-2' gas pipeline.
- 2This agreement marks a significant milestone in a project that has been under discussion for several years.
- 3The pipeline is designed to transport 50 billion cubic meters of Russian natural gas to China via Mongolia.
- 4Progress on the deal had historically been slow, with the primary obstacle being the pricing of the gas supplies.
Quick Summary
After years of negotiations, Gazprom and China National Petroleum Corporation (CNPC) have officially committed to the 'Power of Siberia-2' gas pipeline. The two energy giants signed a legally binding memorandum in September 2025 to proceed with the construction of the massive infrastructure project.
The pipeline is set to deliver an annual volume of 50 billion cubic meters of Russian natural gas to the Chinese market. The gas will travel through Mongolia, creating a new energy corridor between Russia and Asia. While the project had been discussed for several years, the path to agreement was difficult. Negotiations moved slowly, largely due to disagreements over the price of the gas. With the memorandum now signed, the parties have overcome the main hurdle that had stalled the project's advancement.
The Strategic Agreement
The 'Power of Siberia-2' pipeline represents a major development in regional energy infrastructure. The agreement was formalized in September 2025 following a prolonged period of diplomatic and commercial discussions. Gazprom, the Russian state-controlled energy corporation, and CNPC, the Chinese national oil company, are the primary entities driving this initiative.
The core of the deal involves the physical construction of a pipeline capable of transporting massive quantities of natural gas. Specifically, the infrastructure will support a flow of 50 billion cubic meters per year. This volume highlights the scale of the project and its importance to the energy security of the receiving nation.
Route and Geopolitics 🌏
The geographical path of the pipeline is a critical component of the agreement. The gas will not travel directly across the Russian-Chinese border but will instead transit through Mongolia. This route leverages Mongolia's strategic position between the two giants, potentially offering economic benefits to the transit country while securing a stable delivery path for China.
The completion of this link will solidify energy ties between Russia and China. It diversifies Russia's gas export routes away from Western markets and enhances China's access to energy resources from its northern neighbor. The project signifies a deepening of the strategic partnership between the two countries.
Negotiation Hurdles 📉
Despite the finalization of the memorandum, the road to this point was not immediate. The source material indicates that the two sides had been discussing the project for several years. The timeline suggests that the technical and logistical aspects of the pipeline were likely established early, but commercial terms remained a sticking point.
The primary factor slowing progress was identified as the price of the gas. Contractual pricing is often the most contentious issue in long-term energy deals, balancing the supplier's revenue needs against the buyer's market rates. The resolution of this pricing dispute was the key to unlocking the agreement in September 2025.
Conclusion
The signing of the memorandum between Gazprom and CNPC serves as the definitive signal that the 'Power of Siberia-2' project is moving forward. By addressing the long-standing issue of gas pricing, the parties have removed the primary obstacle that had previously impeded the project. The agreement sets the stage for the construction of a vital energy artery that will deliver 50 billion cubic meters of Russian gas to China via Mongolia. This development marks a new chapter in the energy relationship between the two nations, with significant implications for the regional energy landscape.
Frequently Asked Questions
It is a gas pipeline project agreed upon by Gazprom and CNPC to transport 50 billion cubic meters of Russian natural gas to China via Mongolia.
The legally binding memorandum regarding the construction of the pipeline was signed in September 2025.
The parties discussed the project for several years, but progress was slow primarily because of disagreements regarding the price of the gas supplies.
