Xi and Putin to reignite talks on Power of Siberia-2 gas pipeline

According to the media outlet, negotiations between Chinese leader Xi Jinping and Russian President Vladimir Putin this week will include a discussion of the Power of Siberia-2 gas pipeline project.

This will make it "connecting the two economies, reviving discussions hampered for years by disagreements on the cost, route, and urgency of the project," the article states.

Prerequisites for negotiations on the Power of Siberia-2 gas pipeline

As noted, Moscow has long tried to conclude an agreement on the Power of Siberia-2 line — in order to strengthen ties, but also to increase gas flows to the world's largest energy importer.

"Russia has become increasingly dependent on sales to China as it struggles to replace the European market, dramatically reduced after the invasion of Ukraine in 2022," journalists note as the reason for the intensification of negotiations on this issue.

In turn, for Beijing, with other supply options and a policy of import diversification, the deal is much less urgent.

"Economic strain on both sides, however, may be bringing both one step closer to a compromise — Russia is under heavy Western sanctions, and China’s own industrial and trade travails make cheaper gas attractive," the authors write.

According to people familiar with the course of government discussions, "Beijing may be ready to break previous deadlock by allowing negotiations on a higher sale price than what has previously been considered."

Now, it is trying to set a rate between the domestic gas price in Russia and the one it pays for gas from the initial Power of Siberia pipeline, which began supplying fuel in 2019.

At the same time, as the media outlet states, there are also points on which Russia and China still have no consensus.

China will insist on a direct connection, preferring to avoid the route through Mongolia. Power of Siberia-2 would allow Russia to supply an additional 50 billion cubic meters per year and would allow China to replace more expensive imports of liquefied natural gas.

For comparison, Russia expects to supply 38 billion cubic meters of pipeline gas to China this year, as the initial Power of Siberia reaches design capacity.

Negotiations have been ongoing for many years

However, negotiations on the connection have been going on for many years, with Beijing refraining even from a preliminary agreement, while Moscow has repeatedly announced an imminent deal.

Several people familiar with the matter said that formal signing of the agreement during the visit is not expected.

Parade in Moscow

On May 9, Kremlin head Vladimir Putin is organizing a parade in Moscow. Among those expected to attend are, in particular, Slovak Prime Minister Robert Fico and Serbian President Aleksandar Vučić.

Xi Jinping will also go to Russia on May 9. His visit will last four days. At the same time, Latvia and Lithuania have banned the plane of Serbian President Aleksandar Vučić from crossing their airspace on the way to the Russian Federation.

We add that a drone attack on Moscow and the region paralyzed the work of Vnukovo Airport for 10 hours. It is here that high-ranking guests fly in for Putin’s parade.