Power of Siberia 2: Like the Bridge to Nowhere?

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Power of Siberia 2: Like the Bridge to Nowhere?

Russia-China pipeline (© Adobe Stock/alexmlx)
Russia-China pipeline (© Adobe Stock/alexmlx)

With the glaring loss of Russia's most attractive natural gas market in Europe following its invasion of Ukraine nearly two years ago, the construction of gas export pipelines to ensure a financial lifeline for the war-torn country has become imperative to Russia's raison d'être.

The Power of Siberia 2 gas pipeline is the key natural gas project behind Vladimir Putin's push to commence construction in 2024.  Indeed, Putin seems to be under “enormous pressure” to build the pipeline or otherwise “a huge amount of gas” will be wasted and Russia will lose money. Putin himself has said that Russia could deliver 98 billion cubic meters of gas per year.

Yet despite a Russian ~ Chinese friendship that knows "no limits" China is in no hurry to construct Power of Siberia 2, as Chinese leverage over price increases the longer construction is delayed.

Construction of one of Russia’s key natural gas projects to ensure a financial lifeline overseas is likely to be slower than expected as China seeks to leverage its “bargaining stance”, according to a Russian source and Chinese analysts.

Bolstering China's position vis-a-vis Russia is its diversification strategy aiming to ensure a stable and reliable supply of energy from numerous sources, as China imports from Australia, Central Asia and Russia.”

“[Beijing] understands really well their bargaining power and the country is in a much stronger position,” a source said. “It’s a specific presidential-level of pressure. It’s about cheaper payment. They can demand deep discounts.”

“In terms of construction, [Beijing] wants to make sure that they have no risks and no costs. Russia is the side that foots the entire bill,” added a source, who was unwilling to disclose their name due to the sensitivity of the issue.

So Power of SIberia 2, this long-touted symbol of bilateral cooperation between Russia and China, will be sorely tested in the new year.  And if it can survive the stress and strain of interminable delay, China will have enhanced its security of supply on the cheap -- the ghosts of Putin's imperial strategy have come home to roost.

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