Russia and China Strengthen Bilateral Relations with $100s of Billion Gas Deal

Strategic Insights -

Russian President Vladimir Putin and his Chinese counterpart Xi Jinping have taken their countries' strong bilateral relations to a new level by signing over 20 deals, including a major gas pipeline agreement between Gazprom and the China National Petroleum Corp. The 6,700-kilometre-long Power of Siberia 2 pipeline, with a capacity of 50 billion cubic metres per year, will supply gas to China at a lower price than to Europe, according to Alexei Miller, Gazprom's chief. The contract, set for 30 years, is estimated to be worth tens of billions of dollars.

Key Takeaways:

  • Gazprom and the China National Petroleum Corp have signed a legally binding memorandum for the construction of the Power of Siberia 2 pipeline through Mongolia to China, with a capacity of 50 billion cubic metres per year.
  • The price of gas supplied via the pipeline will be lower than for Europe, due to reduced transport costs.
  • The timeline for the construction of the new pipeline remains unclear, after five years of negotiations between Moscow and Beijing over the price.
  • The two countries have agreed to a trial of visa-free travel for Russians with valid passports to China, for stays up to 30 days.
  • The agreement includes cooperation in fields such as energy, aviation, artificial intelligence, and agriculture.
  • The leaders have signed other cooperation agreements, with no details emerging on their discussion of the Russia-Ukraine conflict.

Statistics:

  • The Power of Siberia 2 pipeline is expected to have a capacity of 50 billion cubic metres per year.
  • The price of gas supplied via the Power of Siberia 2 pipeline will be lower than for Europe.
  • The contract for the Power of Siberia 2 pipeline is set for 30 years.
  • The length of the Power of Siberia 2 pipeline is 6,700 kilometres, with 2,700 kilometres in Russia.
  • Over 20 deals were signed by Putin and Xi Jinping, including the Power of Siberia 2 pipeline agreement.

Sources:

  • "Alliance News" - "Russian President Vladimir Putin and his Chinese counterpart Xi Jinping sign over 20 deals as they strengthen bilateral relations" (no date).
  • "Xinhua" - "Russian, Chinese leaders sign major deals on energy, trade" (no date).
  • "TASS" - "Russia, China agree on trial period for visa-free travel" (no date).