Russia and China finalize route for Power of Siberia 2 gas pipeline

Russia’s Gazprom and China have reached a legally binding agreement on the route of the Power of Siberia 2 pipeline, a 2,600‑km gas artery that will transport up to 50 billion cubic metres per year from Russia’s Yamal fields, through Mongolia, to northern China. The project targets first deliveries around 2030 and is intended to operate for 30 years, potentially raising total Russian pipeline gas supplies to China to about 100 bcm annually.

While the route is settled, pricing terms and construction timelines remain under discussion. The agreement is expected to be settled largely in Chinese yuan, reflecting a broader move by Moscow and Beijing to conduct energy trade outside the U.S. dollar system. If fully realized, the deal would become the largest non‑dollar energy contract by volume, offering China a significant new source of piped gas and reducing its reliance on seaborne LNG.

The pipeline could supply roughly 20 % of China’s gas demand by the 2030s and help Russia replace lost European gas revenues following its invasion of Ukraine. The arrangement also has implications for global energy markets, potentially easing LNG competition for Europe and Asia.