Exclusive | China wielding ‘bargaining power’ with Russia over Power of Siberia 2 natural gas pipeline
- Construction of the Power of Siberia 2 natural gas pipeline is likely to be slower than expected despite the ‘no limit’ strategic partnership between Beijing and Moscow
- Russian President Vladimir Putin has promised to export at least 98 billion cubic metres per year of gas from Russia to China
Construction of one of Russia’s key natural gas projects to ensure a financial lifeline overseas is likely to be slower than expected as China seeks to leverage its “bargaining stance”, according to a Russian source and Chinese analysts.
The discussions with Beijing over the construction of the Power of Siberia 2 natural gas pipeline, a long touted signal of bilateral cooperation, have progressed slowly.
The pipeline, if completed, would divert 50 billion cubic metres (1.8 trillion cubic feet) of natural gas per year that previously supplied Europe to north China, offering a significant boost to Beijing’s energy security.
To export at least 98 billion cubic metres per year of gas from Russia to China as promised by Russian President Vladimir Putin, figures from Spanish multinational financial services firm BBVA showed that the new pipeline is needed because the Power of Siberia 1 is limited to 67 billion cubic metres per year.
It’s a specific presidential-level of pressure. It’s about cheaper payment. They can demand deep discounts
A source with knowledge of the issue in Russia said China is showcasing a “bargaining stance”.