Fresh doubts have been cast over Russia’s proposed new gas pipeline through Mongolia to China after the newly-elected Mongolian government published its “Action Program” for 2024-28, prioritising medium and long term development priorities, with the so-called “Power of Siberia 2” pipeline excluded.
Analysts told South China Morning Post the omission showed that project was stalled amid ongoing disagreement between Russia and China over the price Russia would charge for the gas.
The idea for the the 2,600km-long pipeline has been jointly developed by China National Petroleum Corporation (CNPC) and Gazprom.
It’s expected to take at least five years to build and would ship 50 billion cubic metres of gas to China every year from the Yamal Peninsula gas fields in northwestern Siberia.
Before Russia’s full-scale invasion of Ukraine, much of that gas had been intended for European buyers.
The elusive deal
Anna Kireeva, associate professor at the Moscow State Institute of International Relations, told the Post that CNPC had asked for the gas to be priced in line with domestic Russian prices.
Kireeva said that had been “not suitable for Gazprom” because “great financial resources” were needed to build the pipeline.
Li Lifan, a Russia and Central Asia specialist at the Shanghai Academy of Social Sciences, told the Post: “Mongolia hopes to get investment from China and Russia, [but] Russia does not have the money and China is not in a rush to build the pipeline.”
Munkhnaran Bayarlkhagva, a former official at Mongolia’s National Security Council, told the Post: “We are entering a long pause, where Moscow no longer believes it can get the deal it wishes from Beijing and will probably park the project until better times.”
New Russian urgency
China and Russia have been discussing the pipeline for years, but the matter gained urgency after many European states stopped buying Russian gas after the Ukrainian invasion.
Since then, Russian officials have presented the project as imminent.
In October last year, a deputy prime minister, Viktoria Abramchenko, claimed work on the Mongolian section would start in the first half of this year.
In May this year, another Russian deputy prime minister, Alexander Novak, said a contract to build it would be signed “in the near future”.
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