Putin fails to secure Xi's backing for Power of Siberia 2 gas pipeline

September 9, 2026 at 09:13 PM2 min

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Russian President Vladimir Putin failed to persuade Chinese leader Xi Jinping to advance the Power of Siberia 2 gas pipeline during talks at the Shanghai Cooperation Organization summit in Bishkek. Negotiations over the 50 billion cubic meter per year pipeline have stalled over pricing, with China seeking a price of about $50 per thousand cubic meters and Russia proposing $250-260. The final communique made no mention of the gas project.

Key Facts

The Power of Siberia 2 pipeline is designed to carry 50 billion cubic meters of gas per year.
China wants to pay about $50 per thousand cubic meters, while Russia proposes $250-260 per thousand cubic meters.
The final communique of the Putin-Xi meeting made no mention of the gas project.
Russian Energy Minister Sergey Tsivilyov said the project is in the 'final stage of moving to construction'.
Gazprom's exports have fallen to 70-80 billion cubic meters per year, the lowest since the mid-1980s.

Pricing Dispute

China wants the gas at the price its citizens pay, about $50 per thousand cubic meters, or at least at Russia's domestic industrial price of $120-130. Russia proposes to base the price on what Beijing pays for Power of Siberia 1 gas, which is $250-260 per thousand cubic meters. That price already includes a nearly 40% discount compared to Gazprom's other long-term contracts at $420 per thousand cubic meters.

Repeated Promises

Russian officials have made at least 10 similar statements about the project's readiness since early 2022, according to Vektor Capital analysts. In September 2022, Putin claimed the main parameters of the deal, including price terms, had been agreed. In March 2023, then-Energy Minister Alexander Novak announced the contract would be signed by the end of the year. Novak has since said four more times that the deal is in its final stage and will be signed soon.

Gazprom's Export Decline

Gazprom has effectively lost its European market, where it previously supplied up to 200 billion cubic meters per year. The company's current exports are around 70-80 billion cubic meters per year, the lowest for Russia since the mid-1980s. Hungary, Slovakia, and Greece continue to buy Gazprom gas, but these flows may stop in 2027 due to the EU gas embargo.