China signals willingness to cooperate with Russia on stalled gas pipeline

When asked about the apparent impasse, Chinese Foreign Ministry spokesperson Mao Ning told reporters Monday that deepened integration of interests and achieving mutual success is a consensus reached between the two countries leaders.

China says it remains ready to cooperatively pursue the Power of Siberia-2 gas pipeline project with Russia, even amid reports that negotiations over the major energy deal have stalled.

When asked about the apparent impasse, Chinese Foreign Ministry spokesperson Mao Ning told reporters Monday that deepened integration of interests and achieving mutual success is a consensus reached between the two countries’ leaders.

The comments come after the Financial Times reported that talks between Russia and China have reached a deadlock over Beijing’s demands for rock-bottom pricing and strict annual supply volumes for the pipeline’s natural gas deliveries.

The Power of Siberia-2 pipeline is a proposed second major gas route Russia hopes will reroute supplies to China that were previously sent to Europe before sanctions over Moscow’s Ukraine invasion severely curtailed those exports.

However, with Russia increasingly isolated and desperate for energy market alternatives, China appears set on negotiating very favourable terms for the 30-year pipeline deal estimated at over $100 billion.

Gazprom, Russia’s state-owned energy giant, has seen its profits plummet by over 40% through the first quarter amid declining European sales and other pressures. The Power of Siberia-2 is viewed as crucial for shoring up its position and boosting export volumes to Asia.

Russia has already pivoted export infrastructure toward China through the operational Power of Siberia pipeline, which began sending gas east in 2019 under a $400 billion deal struck four years earlier.

Despite their professed “no limits” partnership, major differences in negotiating leverage have emerged, dampening hopes the Power of Siberia-2 can be finalized soon. China’s latest rhetoric suggests it aims to keep Russia waiting for more concessions for the massively expensive project to proceed.