Russia, China move closer to building new gas pipeline

MOSCOW

Russia said on Sept. 2 that it had signed a legally binding agreement with China to build a new cross-border gas pipeline, the latest in a series of moves by the allies to bolster ties.

The memorandum of understanding to build the Power of Siberia 2 pipeline was signed during a visit to China by Russian President Vladimir Putin.

Although the move is a step forward in the long negotiations on the massive pipeline, the memorandum is not definitive, and many details, such as pricing, remain unclear.

The pipeline would transit Mongolia and be capable of supplying 50 billion cubic meters of gas annually, according to Russian state news agency TASS.

"Today, a very important step has been taken to further strengthen and develop our strategic partnership to increase reliable supplies of clean energy—natural gas—to China," said Gazprom CEO Alexei Miller.

Gazprom and the China National Petroleum Corporation (CNPC) also agreed to raise shipments by 15 percent in the existing Power of Siberia pipeline, Russian news agency Interfax reported, citing Miller.

China and India have replaced Europe as the biggest buyers of Russian oil and gas, providing a lifeline for Putin's economy, which has been weighed down by military spending on the back of the grinding war in Ukraine, now in its fourth year.

The memorandum to build Power of Siberia 2 was among more than two dozen agreements signed between Moscow and Beijing during Putin's four-day visit to China, according to the Kremlin.