June 22, 2024
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OIL & GAS

Russia Explores Dual Oil and Gas Pipeline to China via Mongolia

Russian President Vladimir Putin on Friday announced the potential for delivering both oil and gas to China through a planned route via Mongolia.

This proposal was confirmed during Putin’s two-day visit to China and reflects Russia’s strategic push to enhance energy exports to China amid reduced exports to Europe due to the Ukraine conflict.

The proposed route includes the Power of Siberia 2 gas pipeline, intended to deliver 50 billion cubic meters of gas annually to China.

“Moreover, it’s possible to lay both a gas pipeline and an oil pipeline in the same corridor,” Putin said, appearing to revive an idea that was discussed as far back as 2018.

Additionally, Putin mentioned the possibility of delivering energy by tanker via the Northern Sea Route through the Arctic, emphasizing that all options are economically viable and under consideration.

The project is critical for Russia as it seeks to replace the European gas market lost due to geopolitical tensions.

Russia currently supplies gas to China through the Power of Siberia 1 pipeline, operational since 2019.

Experts indicate that China may not require additional gas supplies until after 2030, potentially leading to stringent price negotiations.

Putin asserted that the project would be immune to Western sanctions, saying, “Nobody can get in the way of this, neither sanctions on tanker fleets nor even sanctions on financial institutions. We will buy and sell everything in our national currencies. So the interest from both sides is confirmed.”

The move is aimed at strengthening bilateral energy ties independent of Western economic pressures.

While the cost of the 2,600 km Power of Siberia 2 pipeline is undisclosed, analysts estimate it could reach up to $13.6 billion.

Russia’s energy minister Alexander Novak has said in a television interview that a contract is expected to be signed soon.

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