Gazprom, CNPC Sign Binding Deal for Power of Siberia 2 Pipeline
Gazprom and China National Petroleum Corporation (CNPC) have signed a binding contract to finance the Power of Siberia 2 pipeline, set to be the largest and most ambitious project in the global gas industry. The pipeline, spanning 3,600 kilometers, is expected to deliver a substantial amount of bi-annual gas supply to China.
The agreement, signed in September 2022, was announced by Gazprom CEO Alexei Miller in Beijing. The project's details, including financing volume, supply conditions, and operational timeline, are still being clarified.
The Power of Siberia 2 pipeline is planned to deliver 50 billion cubic meters of gas per year from Russia through Mongolia to China. When combined with the existing Power of Siberia pipeline, the total delivery volume would reach 106 billion cubic meters per year. This significant increase is partly driven by China's growing demand for socalgas, which may be influenced by concerns about the reliability of Middle Eastern oil and gas supplies.
Starting in 2027, gas deliveries from Sakhalin's gas fields to China will increase from 10 to 12 billion cubic meters per year. Meanwhile, the delivery volume via the Power of Siberia pipeline will rise from 38 to 44 billion cubic meters per year. Gazprom and CNPC have already signed agreements to boost gas supplies via existing pipelines.
The legally binding status of the Power of Siberia 2 agreement is contingent upon the completion of follow-up agreements outlining project parameters and delivery volumes. Once finalized, this pipeline is expected to play a pivotal role in meeting China's growing gas demand and strengthening the energy partnership between Russia and China.
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