Russia’s gas giant Gazprom has signed an agreement with China’s state energy firm CNPC to build a second major natural gas pipeline from Russia to China, Gazprom CEO Alexey Miller announced on Tuesday.
Gazprom and CNPC signed a “legally binding memorandum” on the construction of the Power of Siberia 2 gas pipeline, which will run from Russia to China via Mongolia, according to Oilprice.com, citing Russian media reports.
The Power of Siberia 2 has been under discussion between Russia and China for years, but until now, no significant progress had been made.
Currently, Russia supplies pipeline gas to China via the original Power of Siberia pipeline—one of Gazprom’s largest recently completed projects and the first direct conduit for Russian gas to China.
The proposed Power of Siberia 2 pipeline is intended to transport gas from Russia’s Western Siberian Altai region to northeastern China through Mongolia.
However, an agreement on the project has remained elusive due to key sticking points, including the price at which Gazprom will supply the gas.
The memorandum signed on Tuesday does not include crucial details such as pricing or capacity commitments, meaning the core issues remain unresolved.
“It should be understood that the construction of the Power of Siberia 2 gas pipeline and the Soyuz Vostok gas pipeline—the transit pipeline through Mongolia—and related gas transport facilities in China will now constitute the largest, most expansive, and most capital-intensive project in the global gas industry,” Russian news agencies quoted Miller as saying on Tuesday.
Russia has promoted the project as the largest of its kind in the global gas sector. However, China has yet to confirm the deal, which remains light on specifics.
Miller also acknowledged that Russia and China have yet to address critical issues, including financing and pricing.
Source: https://energynewsafrica.com
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