Russia’s planned Power of Siberia 2 pipeline intended to ship Russian gas to China is facing delays, the Financial Times reported yesterday.
The 3,550km line under discussion and development for the past 10 years will carry gas from the Yamal and Gydan peninsulas in western Siberia to China through Mongolia.
It’s meant to join the Power of Siberia 1, which began transporting gas from the east of the region in 2019.
The Yamal peninsula in the Arctic had previously supplied Europe with low-cost energy. Gydan is presently the site of a $21bn gas treatment and liquefaction project.
Work on the vast project was expected to begin in Mongolia in the first half of this year, with the aim of delivering up to 50 billion cubic metres of gas a year by 2030.
Mongolia’s prime minister Luvsannamsrain Oyun-Erdene told the Financial Times that Russia and China had yet to agree on details of the project.
“Those two sides still need more time to do more detailed research on the economic studies,” he said, adding that record global gas prices during the past two years had complicated negotiations.
“The Chinese and Russian sides are still doing the calculations and estimations and they are working on the economic benefits.”
This could mean the two sides are haggling over the price China will pay for the “stranded” gas.