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Russia, China to tackle pricing standoff on massive gas pipeline project

Russia and China are poised to negotiate critical terms for Power of Siberia 2, a 2,600-kilometer natural gas pipeline. The project would transport 50 billion cubic meters annually from Russia's Yamal fields to China through Mongolia. Moscow and Beijing inked a legally binding memorandum in September 2025, but fundamental disagreements persist over pricing, financing, and delivery schedules. Beijing seeks rates matching Russia's domestic benchmark of $120-130 per 1,000 cubic meters, while Moscow demands pricing closer to the existing Power of Siberia 1 corridor—substantially higher terms. The standoff occurs as China's Russian oil imports surged 35% year-over-year in the first quarter. The new pipeline would supplement Power of Siberia 1, which currently delivers roughly 38 billion cubic meters annually, with both nations agreeing to expand existing capacity further.