Russian President Vladimir Putin (L), Chinese President Xi Jinping (2nd R) and Mongolian President Ukhnagiin Khurelsukh (not seen) get collectively for a trilateral assembly in Beijing, China on September 2, 2025.
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Russia and China on Tuesday signed a legally binding deal to construct the long-delayed Power of Siberia 2 gas pipeline, deepening industrial ties in what’s prone to be seen as a defiant sign to the West.
Alexei Miller, the chief government of Russia’s state-owned vitality big Gazprom, instructed Russian information companies {that a} memorandum of understanding had been signed on the development of the new gas pipeline, following talks between Russian President Vladimir Putin and China’s Xi Jinping in Beijing.
The pipeline, which is ready to transit gas reserves in Russia’s West Siberia to northern China through jap Mongolia, will make it attainable to produce 50 billion cubic meters (bcm) of gas per yr, Miller mentioned, in keeping with Russia’s Interfax information company.
Supplies beneath the new Power of Siberia 2 settlement will run for 30 years.
The value of the gas through the new pipeline can be agreed on individually, Miller mentioned. The two nations additionally signed a separate settlement for Gazprom to spice up gas provides to China by the prevailing Power of Siberia pipeline.
A Gazprom spokesperson was not instantly obtainable to remark when contacted by CNBC. Beijing has not but confirmed Miller’s announcement, though state information company Xinhua reported that the 2 nations signed greater than 20 cooperation agreements, with vitality offers amongst them.
Russia’s gas exports to Europe have collapsed since Moscow’s full-scale of invasion of Ukraine in early 2022. The West has imposed punitive financial sanctions on the Kremlin and lowered dependency on Russian vitality, in search of to chop off a serious supply of revenues funding Putin’s conflict machine.
The European Union, for instance, launched measures to cease the import of Russian gas and oil by the top of 2027, whereas the U.S. imposed a ban on the import of Russian fossil fuels in March 2022.
The measures have injected recent urgency into Moscow’s years-long push to construct the Power of Siberia 2 gas pipeline. As a end result, Russia has been making an attempt to pivot to Beijing to switch Europe as its main gas buyer.
A new multipolar order
Christopher Granville, managing director at TS Lombard, mentioned that whereas the importance of the Power of Siberia 2 gas pipeline settlement is “somewhat limited,” it shouldn’t be dismissed as a “nothing burger” both.
“For the past decade, Gazprom has been pushing China to give the go-ahead for Power of Siberia-2, only to be met – until now – with positive but non-committal noises. So today’s signing of a MOU is a step forward for Gazprom,” Granville instructed CNBC by electronic mail.
“The fact that this has happened against the background of the fraught Ukraine war endgame, is a clear enough signal of China’s steady strategic backing for Russia as the lynchpin of the new multipolar order to which both these core Eurasian powers aspire,” Granville mentioned.
Russian President Vladimir Putin greets Mongolian President Ukhnaa Khurelsukh previous to a trilateral assembly with Chinese President Xi Jinping (not pictured) on the Great Hall of the People on September 2, 2025 in Beijing, China.
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It is a great distance, nevertheless, from an MOU to a Final Investment Decision. The equal MOU-style settlement in precept on the unique Power of Siberia pipeline was struck within the mid-2000s, Granville mentioned, noting {that a} definitive pricing settlement was not agreed till 2014.
Russia and China have sought to showcase a new international safety and financial order on the annual Shanghai Cooperation Organization (SCO) summit.
In a thinly veiled swipe at U.S. President Donald Trump‘s administration, China’s Xi mentioned in his opening speech on Monday that the world had entered “a new phase of turbulence” with international governance at a “new crossroads.”
‘Trump Always Chickens Out’
Timothy Ash, an affiliate fellow within the Russia and Eurasia program at Chatham House, mentioned China has been “playing very hard” to get the Power of Siberia 2 gas pipeline deal over the road.
That’s partly due to Russia’s urgency to signal an settlement given the lack of greater than 120 bcm in gas exports to Europe, Ash mentioned, and maybe as a result of Beijing had beforehand been “mindful of not annoying” the Biden administration by going all out in assist of Putin.
U.S. President Donald Trump within the Cabinet Room of the White House on Aug. 26, 2025 in Washington, D.C.
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“But now I think likely the Chinese got a better deal, in terms of the pricing, and perhaps are now more willing to fund the construction,” Ash instructed CNBC by electronic mail.
“I think Xi has figured out TACO and that only by adopting a strong, tough stance towards the US, will the US actually back down,” Ash mentioned. The TACO acronym refers to “Trump Always Chickens Out,” a time period to explain the back-and-forth nature of the president’s tariff insurance policies.
“I think this SCO has all been about presenting a United front to the US, that the Global South will not back down in response to US pressure,” he added.