Power Of Siberia 2 Agreement ?

The ongoing trade tensions between the US and China are intensifying. In response to Donald Trump's 34% tariffs, Beijing introduced a symmetrical response and also ceased purchasing American liquefied natural gas (LNG). In addition, due to the high tariffs, China has begun to resell it on the global market. This is occurring concurrently with the EU's decision to increase its purchase of American LNG in exchange for tariff reductions. Experts believe that the current situation could present a favourable opportunity for Russia and China to accelerate their efforts on the Power of Siberia 2 project. As reported by the Chinese Embassy, a high-level Chinese delegation is expected at SPIEF-2025. The Izvestia article discusses the prospect of an agreement between the countries regarding the gas pipeline.

However, the introduction of "reciprocal" tariffs has led to a halt in Chinese purchases of American liquefied natural gas (LNG). According to data from Kpler, a ship-tracking company, no American shipments are currently en route to China. During the initial phase of President Donald Trump's trade war, China did not accept shipments from the United States for approximately 400 days, until April 2020. In addition, China has begun to resell American raw materials, since Beijing's additional tariffs make sales to China unprofitable.
According to experts, maintaining stable strategic cooperation with Russia is one of the most important ways to mitigate the risks of a potential trade war between the US and China.
Tensions between China and the United States over tariff increases appear to be escalating. The United States' use of heavy-handed and rude tactics has led to a harsh response from China.In addition, China is seeking to provide a more favourable environment for foreign economic policy, as demonstrated by the recent conversation between Premier Li Qiang and EC President Ursula von der Leyen. Yang Cheng, a professor at Shanghai International Studies University, has highlighted the importance of stable strategic cooperation with Russia in mitigating the risks of a potential trade war between the United States and China.
He believes that resuming Russian-Chinese cooperation on the Power of Siberia 2 gas pipeline is a viable option in this context.
"In the long term, such a partnership will provide increased stability for the sustainable economic development of both China and Russia. However, the construction of the pipeline gives rise to complex issues such as route determination, pricing mechanisms and unstable market demand, which require deeper discussions between both sides," the source added.

Alexey Grivach, Deputy Director General for Gas Issues at the National Energy Security Fund, concurs.

"This is an opportune moment for China to demonstrate its independence in energy policy and accelerate the implementation work on the Power of Siberia 2 pipeline. However, I am uncertain whether they are prepared to further escalate relations with the US at this time," he said.
However, the Chinese authorities have stated that they will not be tolerant of the mounting pressure from the United States as a result of the protectionist policies of American President Donald Trump, who they have accused of "blackmail". This information was communicated by the Chinese Ministry of Commerce. In the event of Washington maintaining this course of action, Beijing will be compelled to adopt a robust stance in defence of its interests. The Chinese Ministry of Commerce has stated that China will not be pressured into changing its trade policies by the United States. If Washington continues to pursue its protectionist policies, China will have no choice but to resist.
Vyacheslav Mishchenko, the head of the Center for Analysis of Strategy and Technologies for the Development of the Fuel and Energy Complex, believes that if Trump and Jinping do not reach an agreement, China will return to the Russian option of supplies and "actively discuss them". "Due to the current geopolitical climate, it would be in China's best interest to resume or accelerate negotiations on Power of Siberia 2. However, no official statements or insider information have been provided as of yet," the expert added.

Meanwhile, it is worth recalling that PRC Chairman Xi Jinping will come to Moscow not only to celebrate May 9, but will also pay a full-fledged state visit. Gazprom has declined to comment on the negotiations with the Chinese side. The Chinese state-owned company CNPC did not respond to my request for a comment.
The matter of attendance at the SPIEF is currently being addressed. A high-ranking official will be present, though the delegation leader is yet to be announced. We attach great importance to this forum, so there will be a solid delegation from the Chinese side. A substantial delegation is also anticipated on May 9. Several high-level accompanying persons and official officials are expected, as Zhang Wei, Plenipotentiary Minister of the Chinese Embassy in the Russian Federation, informed Izvestia.
Cui Heng, a lecturer at the Center for International Legal Training and SCO Cooperation at Shanghai University of Political Science and Law, believes that an agreement on this project will be reached at the China-Central Asia and SCO summits this year.

The expert added that negotiations on natural gas prices may require both sides to make compromises.

At present, pipeline gas is supplied to China via the Power of Siberia gas pipeline. This project, initiated in December 2019, is a joint venture between Gazprom and CNPC. Gas is sourced from fields in Eastern Siberia and Yakutia. The export capacity is 38 billion cubic metres per year. In 2024, deliveries totalled 31 billion cubic metres. The gas pipeline is scheduled to reach full capacity in 2025.

The Power of Siberia 2 project aims to connect the gas fields of Yamal and Western Siberia with China via Mongolian territory. In April 2025, Mongolia agreed on a route through its territory. The gas pipeline's initial design capacity is 50 billion cubic metres of gas per year. The implementation of the Power of Siberia 2 gas pipeline faces a number of obstacles. The primary challenge is the absence of a definitive agreement between Gazprom and the China National Petroleum Corporation (CNPC). The negotiations, which began in 2020, are being delayed due to disagreements over the price of gas. China is insisting on a price close to subsidised domestic tariffs in Russia, while Gazprom is focusing on the higher rates it gets for its exports.
In the wake of the Trump administration, the Treasury Department is implementing 34% tariffs on all American goods from April 10. This move has been met with concern by global experts, who have described the Chinese response as a significant escalation in the global trade war.

In response to Beijing's tariffs, the US president threatened China with 50% tariffs on top of those already announced unless Beijing reversed its retaliatory measures by April 8, which China, of course, has not done. Trump's latest announcement would be in addition to the 34% "reciprocal" tariff, as well as the 20% increase implemented earlier this year. This would result in a combined tariff rate of 104%, effectively doubling the import price of any goods shipped from China to the US.
According to Reuters, Alex Siou, an analyst at ICIS, has stated that Chinese LNG importers are likely to shift their strategy from attempting to resell American LNG in Europe to considering the resale of all American LNG, due to the significant difference in tariffs that would need to be paid.
According to Chinese customs data, the US is expected to account for around 5% of China's LNG imports by 2024.

Meanwhile, Europe has decided to increase its purchases of American gas in exchange for Trump's tariff easing, according to European Commission spokesperson Anna-Kaisa Itkonen.
" She also stated that half of the EU's LNG already originates from the US, but that they remain open to continuing negotiations to increase imports.

She emphasised that the EU is seeking to reduce its reliance on Russian energy resources and that the US is "an important partner in diversifying supplies". "The EU is seeking to reduce its reliance on Russian energy resources, and the US is an important partner in diversifying supplies," she stated.
Alexander Frolov, Deputy Director General of the Institute of National Energy, stated that the EU, given its limited supply, has no alternative to US supplies to meet current demand.
He notes that the total demand, including the need to pump up to 70 billion cubic metres into underground gas storage facilities, only exacerbates the dependence. The redistribution of flows from the Chinese market to the European one will have an extremely limited effect (6-8 billion cubic metres). This gas will be produced in the USA.

The EU's challenges might be partially addressed by restarting Yamal-Europe and granting approval for the operation of Nord Stream 2. However, it is unlikely that the EU authorities will agree to this course of action, according to the expert.
Meanwhile, similar, albeit less prominent, calls are being made in Europe. This was stated in particular by the leader of the party "Die Linke" (The Left), Sahra Wagenknecht. In response to the tariffs imposed by the US, she has called for a strategic restructuring. In light of the tariffs imposed by the US, Ms Wagenknecht has called for a strategic restructuring of Germany's economic relations with the BRICS countries, with a view to the country becoming less dependent on the US for both digital and energy resources, and to Russia becoming a viable source of pipeline gas once more. "