Russian Deputy Prime Minister Novak recently released an exciting news, announcing that China and Russia have reached an agreement in principle on the "Power of Siberia 2" gas pipeline. Novak said the two sides are considering specific commercial terms, including **, delivery methods and payment methods. Although the final agreement has not yet been finalized, this agreement in principle has already taken a substantial step. The cross-border land gas pipeline project is expected to pass through Mongolia and has a maximum capacity of up to 50 billion cubic meters.
At the same time, Russia's Putin held one-on-one working talks with Gazprom President Miller to discuss energy matters. Putin's movements have attracted attention, and a reporter specializing in Putin's coverage said on social media that the working talks between the two lasted until 2 a.m. Gazprom, the world's largest gas producer, controls more than 65% of Russia's natural gas reserves, and Putin's working talks with Miller are likely to involve the agreement in principle on the Power of Siberia 2 project just signed with China. Miller reported to Putin on the progress of Gazprom's natural gas ** to China in 2023 will increase by 50% year-on-year, and by 2025 it will fulfill its contractual obligations, and its gas ** to China will reach 38 billion cubic meters.
The "Power of Siberia 2" project was first mentioned in 2020, and after the outbreak of the Russia-Ukraine conflict last year, the Russian side began to accelerate the project. Novak said that "Power of Siberia 2" will fill the gap in demand after the shutdown of the Nord Stream pipeline, and Russia will reach an agreement with the Chinese side "in the near future". Mongolian Prime Minister Oyun Erden expects the project to start in 2024 and be completed by 2029. At a meeting in March this year, the heads of state of China and Russia revealed that the two sides had agreed on the main parameters of the construction of the project. Subsequently, Novak said that Gazprom had received instructions and would push for the signing of the agreement as soon as possible.
At this year's Sino-Russian summit, Novak discussed the progress of the project with the Chinese side, and after returning home, he said that the two sides had discussed the implementation of the "Power of Siberia-2" pipeline project, stressing the importance of reaching an agreement as soon as possible. It is expected that the two sides will soon agree on a pipeline agreement. Although it is only an agreement in principle, it is already an agreement between the two countries in the general direction. The specific details of the cooperation, such as **, delivery method and payment method, need to be further discussed by both parties. Especially on the ** issue, Putin once said: "On the ** issue, our Chinese friends are not easy to win." ”
Overall, after the general direction was determined, the parties faced a series of challenges in negotiating conditions. This is a large order involving hundreds of billions of dollars, and China occupies the initiative, while Russia appears more urgent. Although there is still some way to go before a final agreement, the agreement in principle is already a positive development. If the "Power of Siberia 2" project can be successfully implemented in the future and achieve a maximum gas transmission capacity of 50 billion cubic meters, plus 10 billion cubic meters of pipeline gas from China and Russia on the Far East route, Russia's annual pipeline gas exports to China will be close to 100 billion cubic meters per year.
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