Power of Siberia-2: the megaproject likely won’t advance

Gazprom CEO Alexey Miller claimed his company struck a major natural gas deal between China and Russia over the Power of Siberia-2 (PoS-2) pipeline. I’m deeply skeptical the 50 billion cubic meter/year pipeline will move forward, however.

• The pipeline will almost certainly be significantly more expensive than PoS-1, increasing already-challenging financing burdens;

• contract terms (especially price) have not been announced;

• China has energy alternatives (heat pumps, electric vehicles, etc) that it can produce domestically;

• pipeline natural gas is less fungible and flexible than liquefied natural gas;

• and Beijing understands that inking a megaproject with the Kremlin would be an immensely provocative act necessitating reciprocal measures by DC and Brussels.

Indeed, focusing on the megaproject may overlook the smaller but substantial deals that are *far* more likely to move forward. If you’re interested in learning more, please see this analysis with my colleague Landon Derentz.

Significantly, Xi did not mention a Power of Siberia-2 pipeline deal in the public readout of an address to the China-Russia friendship committee, suggesting negotiations are ongoing, at minimum – and possibly hinting that Miller spoke out of turn.

This edition is organized into two parts. The first section includes various analyses on the pipeline. If you wrote something and I missed it, please send it to me. The last section includes some short-form commentary on northern Chinese natural gas demand. Much more to come.

ChatGPT 5 prompt: please generate an image of a pipeline crossing Siberia

PoS-2 analyses

Power of Siberia 2: A litmus test of Sino-Russian relations - Henrik Wachtmeister for MERICS

If PoS2 proceeds, it will further cement the asymmetrical Sino-Russian relationship, with Russia becoming even more dependent on China for its energy exports. China, in turn, secures another cheap source of energy, insulated from western interference and Middle Eastern volatility, while simultaneously providing a channel for much-needed hard currency to its most important strategic partner in its quest to reshape the world order.

How the Power of Siberia 2 Deal Could Reshape Global Energy – Jane Nakano and Leslie Palti-Guzman for CSIS

While Russia and China have not yet agreed on the crucial detail called “price,” the Power of Siberia 2 pipeline agreement could incrementally rewrite the geopolitical map, where Russia remains relevant to the global gas market while the U.S. role diminishes. All the while, China may continue its rise as a global leader with clout of its own.

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