Power of Siberia-2 Pipeline: Russia and China Finalize Historic Energy Deal via Mongolia

September 2, 2025 – Russia and China have officially signed a long-anticipated deal to build the Power of Siberia-2 pipeline, a project that will pass through Mongolia and deliver massive volumes of natural gas to Beijing. The agreement not only cements Moscow–Beijing energy cooperation but also offers Russia a powerful alternative to the European gas market it lost after the Ukraine war and Western sanctions.

The pipeline, stretching over 2,600 kilometers, will link Russia’s Yamal gas fields in the Arctic with China, moving as much as 50 billion cubic meters (bcm) of gas every year for the next three decades. For Mongolia, the project promises both transit revenues and a larger geopolitical role as a regional energy corridor.

Alongside this deal, Gazprom and China National Petroleum Corporation (CNPC) agreed to expand existing supplies: boosting annual capacity of the Power of Siberia-2 Pipeline from 38 bcm to 44 bcm, and increasing the Far Eastern route from 10 bcm to 12 bcm. This strengthens China’s position as the largest consumer of Russian natural gas.

Advertisement

However, while the signing marks a political milestone, crucial details remain unresolved. Negotiations over pricing, financing, and construction timelines are still underway. Experts note that China is negotiating carefully, ensuring energy security at favorable terms, while Russia is eager to lock in long-term contracts after losing its dominant European market.

Energy analysts believe the pricing of Siberia-2 gas will likely be cheaper than European levels, largely because of the pipeline’s length, challenging terrain, and China’s stronger bargaining position.

The Power of Siberia-2 pipeline underscores the growing “no-limits” partnership between Moscow and Beijing. For Russia, it represents a strategic lifeline amid isolation from the West, while for China, it secures a stable energy supply at discounted rates.