Russia and China Push for 50bcm Gas Pipeline Deal as Energy Ties Deepen

October 23, 2026 | By Semahegn Nigatu

Russia and China are seeking to finalise commercial agreements by the end of 2026 for a proposed gas pipeline capable of delivering up to 50 billion cubic metres of gas annually to China, as Moscow steps up efforts to redirect energy exports towards Asia.

Russian Deputy Prime Minister Alexander Novak said Gazprom and China National Petroleum Corporation were negotiating the project, known as Power of Baikal, following talks between Russian Prime Minister Mikhail Mishustin and Chinese Premier Li Qiang in St Petersburg on October 21.

“We are waiting for our companies to complete commercial negotiations and hope they will reach the relevant agreements by the end of the year,” Novak said, according to remarks reported after the meeting.

The proposed pipeline, previously known as Power of Siberia 2, would transport gas from Russia’s Yamal Peninsula through Mongolia to China. Its planned annual capacity of 50 billion cubic metres would significantly expand Russia’s ability to supply the world’s second-largest economy with pipeline gas.

However, the project still requires a final commercial agreement. Pricing remains a key obstacle, with Beijing seeking favourable terms and Moscow insisting on a commercially acceptable arrangement.

Russia already supplies gas to China through the Power of Siberia pipeline, which has an annual capacity of 38 billion cubic metres. Deliveries reached 38.8 billion cubic metres in 2025, according to the supplied report.

The proposed new route would give Russia another outlet for gas from western Siberia, resources that previously served European markets before deliveries fell sharply following the escalation of the war in Ukraine and subsequent Western sanctions.

For Moscow, the project offers a potential long-term means of replacing part of its lost European demand. For Beijing, it could provide an additional source of pipeline gas, although the scale of any benefit would depend on final pricing, contractual terms and construction.

The energy discussions formed part of the 31st regular meeting between the two countries’ heads of government, which concluded with the signing of a joint communiqué.

The two sides also discussed transport, agriculture, industry, education and other areas of economic cooperation. Mishustin said more than 90 joint projects were under way.

Russia and China are also expanding the use of the Northern Sea Route, with Moscow seeking to develop it as an international transport corridor. Mishustin said bilateral cargo transit was increasing and border-crossing capacity was being expanded.

Agricultural trade provided another area of growth. Trade in agricultural products between the two countries increased by more than a third in the first nine months of 2026 compared with the same period a year earlier, Mishustin said. The supplied report put agricultural trade at 11 billion US dollars in 2025, up 21% from 2024.

The two governments also agreed to expand cooperation in artificial intelligence, biotechnology and the digital economy, alongside programmes in science, technology, aerospace and education.

Source: FSX Business News