Highlights

• Russia and China signed a legally binding memorandum for the Power of Siberia-2 gas pipeline.
• The pipeline targets a capacity of 50 bcm/yr through Mongolia.
• It represents a strategic move that could anchor Russia's pivot east.
• The pipeline could provide China with steadier, cheaper energy resources.
• Details on pricing and construction remain unsettled.
• The agreement signals deepening energy and industrial alignment between Russia and China.

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Gazprom’s Alexei Miller says Russia and China signed a legally binding memorandum to advance the long-delayed Power of Siberia-2 gas pipeline via Mongolia, targeting ~50 bcm/yr over a multi-decade horizon. Crucially, price, financing, and construction timelines remain unsettled. Beijing’s MFA stuck to boilerplate—“mutual respect” and “mutual benefit”—and deflected specifics to “competent authorities.”

The fine print that matters.

Side agreements lift flows on existing routes: Power of Siberia to 44 bcm/yr (from 38) and the Far East route to ~12 bcm/yr. The Kremlin also touted ~22 bilateral agreements signed during the visit, and Mongolia confirmed the corridor extension through 2031 with explicit pipeline transit language. Miller indicated gas sold to China would be cheaper than to Europe, underscoring who holds pricing power.

Scale check (skip the myth).

At 50 bcm/yr, PS-2 is comparable to Nord Stream-1 (55 bcm/yr) and similar in scale to the built but never-operational Nord Stream-2—so avoid “replacing Europe’s Nord Stream-2” shorthand. This remains a plan with political blessing, not a finalized supply contract.

Energy leverage → rare earths reality.

This is not an REE deal—but it fortifies China’s energy cushion. REE separation and magnet production are power-hungry, especially in Inner Mongolia/Sichuan. Locking in discounted, long-term Russian gas buffers Chinese processing costs and volatility, indirectly strengthening Beijing’s grip on downstream rare-earth supply chains. That’s analysis, not a term of the MoU—but the strategic implication is clear.

Signals to watch next.

1. Pricing formula & take-or-pay terms (the real test of leverage).
2. Construction milestones on the Mongolian leg.
3. Policy spillovers—if energy ties ease Chinese access to broader Russian commodities (metals/minerals), the industrial alignment deepens.

Bottom line.

PS-2 moved from a stalled concept to a politically blessed MoU, with Beijing visibly holding the upper hand. If consummated on China-favorable terms, the pipeline would anchor Russia’s pivot east—and give China steadier, cheaper fuel to power its heavy industry, indirectly reinforcing its rare-earth dominance.

Source: Sina (opens in a new tab)

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