China and Russia have failed to reach an agreement, with their price expectations differing significantly! On September 9, according to a report by the South China Morning Post citing multiple informed sources, negotiations over the "Power of Siberia 2" natural gas pipeline between China and Russia have once again stalled. The core issue remains a long-standing dispute: pricing. China hopes to bring the price down to around $50 per thousand cubic meters—close to Russia’s domestic rate—and at minimum, near the Russian industrial gas price range of $120 to $130.
However, Russia insists on referencing the existing "Power of Siberia 1" pipeline, maintaining prices at $250 to $260. If we calculate based on the lowest and highest bids from both sides, the difference could be as much as fivefold. Prior to this, Putin had renamed the "Power of Siberia 2" project to "Baikal Power," claiming it has entered its final stage of transitioning toward construction. Clearly, from the information disclosed, the biggest point of contention between China and Russia is pricing. In fact, China’s offer and Russia’s demand are far apart.
Of course, from our perspective, we are not in a rush regarding these pipeline projects. The reality is evident: after years of strategic planning, China has established a resilient and diversified natural gas supply system. On land, multiple pipelines from Central Asia provide stable gas supplies, while the volume transported via the China-Russia East Line continues to rise. At sea, numerous LNG receiving terminals have been completed and put into operation domestically, enabling us to procure liquefied natural gas from global suppliers such as Qatar and Australia.
In addition, with continuous expansion of domestic shale gas and coalbed methane production, new long-distance pipelines serve merely as valuable supplements rather than essential necessities. More importantly, China’s rapid transformation toward new energy industries means that wind and solar power installations continue to grow in scale, greatly expanding our choices in energy supply. Conversely, after losing Europe’s traditional large market, Russia urgently needs stable, large-scale long-term buyers to absorb the vast gas reserves from Western Siberia.
In fact, such contracts are ultra-long-term commercial agreements—once signed, they bind parties for two to three decades. While China-Russia political relations are indeed friendly, business should follow business logic. Russia aims to sell at a high price, while China seeks affordable and high-quality energy. Both sides need to continue negotiations. But as the saying goes: “If trade fails, friendship remains.” Even if no contract is concluded, Sino-Russian relations will not be affected.
Original article: toutiao.com/article/1876005756036099/
Disclaimer: The views expressed in this article are solely those of the author.