Power of Siberia 2: Russia's Strategic Pipeline to China
Gazprom's CEO announced a 'legally binding' agreement to build the Power of Siberia 2 pipeline, aiming to transport natural gas from Russia to China through Mongolia. Despite the geopolitics involved, unanswered questions about pricing and financing linger. China's leverage plays a critical role in determining the project's feasibility.
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Russia's Gazprom has reached a 'legally binding' memorandum with China National Petroleum Co to construct the Power of Siberia 2 pipeline. The ambitious project aims to divert Russian natural gas exports from Europe to China, following losses from geopolitical tensions over Ukraine.
During a strategic meeting between Russian President Vladimir Putin and Chinese President Xi Jinping, Gazprom's CEO announced the deal but omitted crucial details such as pricing and financing. Analysts view the announcement as a demonstration of Russia and China's evolving alliance against the United States, as well as a snub to American liquefied natural gas.
Despite potential benefits, the pipeline's progress faces hurdles. China's extensive leverage allows it to negotiate low prices, complicating Russia's efforts to finalize the agreement. The global shift toward renewable energy also questions the necessity for another fossil fuel pipeline in China, underscoring the complexities of future demand predictions.
(With inputs from agencies.)
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