Putin COULD NOT sign a very important document with Xi Jinping | Modern.az

Vladimir Putin's visit to China today again failed to finalize the long-awaited agreement on the construction of the "Power of Siberia-2" gas pipeline for Russia.

Modern.az reports that after talks between Putin and Chinese leader Xi Jinping, Kremlin spokesman Dmitry Peskov stated that there are still "some nuances" that have not been agreed upon for the project, which has been discussed for over 10 years and aims to increase gas exports to China to 100 billion cubic meters per year.

"Some nuances still need to be agreed upon," Peskov said, adding that a general understanding has been reached on the main parameters of the project and the route of the future pipeline, but there is still no precise agreement on the implementation deadlines for the project.

"There is no specific date at the moment. This is commercial information in any case. But this is a fairly significant achievement," Peskov said.

The main problem in the new gas pipeline project, which is vital for "Gazprom" after losing the European market, remains the price of gas. According to a source who previously spoke to "Financial Times," China demands that the gas price be reduced to a level close to Russia's domestic market prices.

This refers to approximately $50 per thousand cubic meters, which is about 5 times lower than the price Beijing currently pays ($258) and 8.5 times lower than the price "Gazprom" applies to its other distant foreign customers ($420).

Furthermore, China is concerned that its gas demand may have already peaked and is therefore cautious about taking on additional gas purchase obligations.

Currently, China imports 38 billion cubic meters of gas from Russia annually, which is half of the gas exported by "Gazprom" to distant foreign countries.
The Russian government plans to increase gas exports to China by 47% to 56 billion cubic meters per year by the end of the decade. Additional gas will be provided through the Far East route (12 billion cubic meters) and by increasing the capacity of the "Power of Siberia-1" gas pipeline (6 billion cubic meters).