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Putin’s Sixth Attempt to Sell Xi on the Power of Siberia-2 Mega-Project
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Russian leader Vladimir Putin is preparing for his sixth meeting with Chinese President Xi Jinping since the launch of the full-scale invasion of Ukraine, aiming once again to push for the long-delayed “Power of Siberia-2” gas pipeline, The Moscow Times reported on August 31.
Meeting at the Shanghai Cooperation Organisation summit in Bishkek, the Kremlin hopes the proposed 50-billion-cubic-meter pipeline will eventually double Russian gas exports to China. This comes as European markets remain largely closed to state energy giant Gazprom.
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Russia is also developing a domestic lithium-ion battery industry for its military drones to circumvent Western supply interdictions. A massive surge in chemical and machinery imports from China and South Korea is reportedly allowing Moscow to establish local manufacturing well ahead of schedule, a push further bolstered by its recent capture of a major lithium deposit in Ukraine’s Donetsk region.
Kremlin aide Yury Ushakov confirmed that energy cooperation and bilateral economic ties will feature prominently in talks with Xi and Chinese Vice Premier Ding Xuexiang, The Moscow Times reported. Despite optimistic statements from Moscow following prior bilateral summits, negotiations over the mega-project have remained stalled for over a decade. Beijing has consistently refused to publicly confirm or sign binding documents for the project.
The primary obstacle to securing an agreement remains a sharp dispute over pricing, with Beijing demanding rates close to Russia’s heavily subsidized domestic market at roughly $50 per thousand cubic meters.
Citing industry data and sources familiar with the negotiations, The Moscow Times noted that this requested rate is five times lower than current prices for the existing Power of Siberia-1 pipeline, where China already receives a 39 percent discount compared to other international customers.
During Putin’s previous visit to Beijing, Chinese officials reportedly instructed the Russian delegation to stop raising the pipeline project until Moscow is willing to adjust its financial terms, effectively demanding that Russia subsidize Chinese gas imports, The Moscow Times wrote.
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The Kremlin aide indicated the pipeline issue could also be raised at the upcoming Eastern Economic Forum in Vladivostok, where Russian and Chinese business leaders are scheduled to gather for a bilateral energy forum.
In another blow to Russian maritime logistics, China had previously honored Western sanctions by withholding critical marine technology needed for Russia’s Arctic ice-class vessels. Without imported propulsion and steering systems, Russian shipyards are unable to build the specialized fleet required to expand the Northern Sea Route.
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-bd8abf028a19131a5f7fe6eeb8e0828a.png "Turkish Coast Guard vessel approaches the grounded Russian cargo ship OMSKIY-107 off the coast of Istanbul’s Şile district. (Source: Turkish Demirören News Agency)")