Putin and Xi to meet on Russian gas pipeline

Russian President Vladimir Putin is scheduled to meet Chinese leader Xi Jinping on Wednesday, with the long-stalled Power of Siberia 2 natural gas pipeline on the agenda. The planned 2,600-kilometer pipeline would carry 50 billion cubic meters of gas annually from Russia's Yamal fields to China via Mongolia.

Moscow and Beijing signed a legally binding memorandum to advance construction in September 2025. Pricing, financing terms, and a delivery timeline remain unresolved. China reportedly wanted pricing terms for the new pipeline to match Russia's domestic rate of around $120-130 per 1,000 cubic meters.

1 system delivers about 38 billion cubic meters of gas to China annually. Both countries agreed to expand its annual capacity further. Kremlin foreign policy aide Yuri Ushakov said Tuesday that the project will be discussed in great detail between the leaders.

At a joint press conference on Wednesday, Putin said his country was ready to continue supplying China with energy and that there is big potential in joint renewable energy projects. The leaders signed a joint statement on strengthening their comprehensive partnership.

Energy market context The U.S.-Iran war that started late February has effectively led to a closure of the Strait of Hormuz, disrupting half of China's oil imports and nearly a third of its LNG supply. Power of Siberia 1 delivered approximately 38 billion cubic meters of gas to China in 2025.

China holds around 1.23 billion barrels in onshore crude inventory, sufficient for roughly 92 days of refining needs. Its domestic gas output rose 2.7% in the first four months of the year. Russia's gas exports to Europe have collapsed since its 2022 invasion of Ukraine, with state-owned energy giant Gazprom seeing shipments reportedly plunge 44% last year to their lowest level in decades.