Moscows proposition to transport Russian gas via Kazakhstan as an alternative to the shelved Power of Siberia 2 pipelinehas stopped working to gain traction in Beijing.The plan, announced by Moscow in the fall of 2024, pictured the shipment of up to 45 billion cubic meters (bcm) of Russian gas annually to China through Kazakhstan.
But Chinese Ambassador to Russia Zhang Hanhui said the job would not go forward, mentioning extreme costs.Gas materials from Russia through Kazakhstan arent feasible, Interfax priced quote Zhang as stating to reporters Tuesday.
Theres just one pipeline, and its already operating at complete capacity.
To transfer Russian gas through this route, wed requirement to build a new pipeline.
Thats too pricey.
The Russian side is studying this option, however its not realistic.
Its not possible.Russian Deputy Prime Minister Alexander Novak initially drifted the concept in November 2024, soon after talks over the Power of Siberia 2 pipeline fell through.President Vladimir Putin had originally proposed Power of Siberia 2 to Chinese leader Xi Jinping in 2022, a project that would increase Beijings purchases of Russian gas to 100 bcm per year to offset the loss of European market share following the intrusion of Ukraine.But in spite of warm rhetoric about a no-limits tactical partnership and Putins duplicated trips to Beijing, Xi has yet to provide the project the green light.According to the Financial Times, the sticking point has actually been price: China reportedly askedthat Russia sell its gas at domestic Russian rates about $60 per 1,000 cubic meters.
Thats roughly one-quarter of what China presently pays under the Power of Siberia 1 agreement, which provides gas at $260 per 1,000 cubic meters.
Additionally, China was only prepared to buy a portion of the pipelines capacity of 50 bcm, feet reported.At the end of 2023, Russian officials insisted that Power of Siberia 2 prepared to deliver 50 billion cubic meters of gas per year remained in an advanced phase of preparedness, with job documentation anticipated to be approved in early 2024.
But more than a year later, construction has yet to begin.Mongolia, through which the 2,500-kilometer pipeline would have passed, has not included the Gazprom-led job in its long-term action plan through 2028, The South China Morning Post reported.Russia has stopped working to reach final terms with China, verified Munkhnara Bayarkhavaa, a former member of Mongolias National Security Council.Last year, Gazprom delivered 31 billion cubic meters of gas to China.
That figure is anticipated to increase this year to38 billion cubic meters, the complete capacity of the Power of Siberia 1 pipeline.
Nevertheless, that still represents only about 15% of Russias former exports to the European Union, which peaked at around 200 billion cubic meters annually.Meanwhile, European demand for Russian gas has actually collapsed following the full-scale intrusion of Ukraine.
In 2023, exports to the EU dropped to 28 billion cubic meters, and are forecasted to reach just 32 billion in 2024 levels not seen given that the late 1970s.