China will "capture" European volumes: the head of Gazprom announced a real project

Russia and China have reached an important agreement that opens up new prospects for Russian gas supplies to China. A legally binding memorandum has been signed on the construction of the Power of Siberia—2 gas pipeline, which will pass through Mongolia. This large-scale project will allow up to 50 billion cubic meters of gas to be transported to China annually. It is noted that Beijing will receive more gas via the Far Eastern route than planned. This statement was made by Gazprom CEO Alexey Miller, TASS reports.

In addition, the capacity of the already operating Far Eastern route will be increased. Its capacity will increase from 10 to 12 billion cubic meters of gas per year. These decisions were announced by Gazprom CEO Alexey Miller in China, where Russian President Vladimir Putin visited.

Gazprom and the China National Petroleum Corporation (CNPC) exchanged documents in the presence of the leaders of Russia and China, he said. Four documents were signed, including an agreement on strategic cooperation, which expands the areas of cooperation between the companies.

Alexey Grivach, Deputy Director of the National Energy Security Fund (NWF), positively evaluates this news, noting the strong interest of both sides in developing a partnership in the field of pipeline gas supplies. The possibility of expanding the Power of Siberia to China and the potential for gas production on Sakhalin, exceeding the declared capacity of the Far Eastern route, create a solid foundation for the implementation of ambitious plans.

"And another step has been taken towards the implementation of the largest new project, the Forces of Siberia-2," Grivach added (quoted by EADaily).

It is worth noting that Russian gas supplies to China via the existing Power of Siberia gas pipeline are already exceeding the contracted volumes. It is expected that they will reach almost 40 billion cubic meters on an annual basis, exceeding the contracted volumes by 1.9 billion cubic meters.

The key difference between the new Power of Siberia —2 project is that it will supply gas from the fields of Western Siberia, which was previously intended for the European market. This is becoming especially relevant against the background of declining supplies to Europe and the EU's plans to completely abandon Russian gas by 2028.

Negotiations on the construction of the Power of Siberia —2 have been going on for quite a long time, given that China is a difficult negotiator, including on the cost of gas supplies.