"China does not know if it will need gas from Russia in such volumes"

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, gave an interview to the Ura.ru internet portal about the prospects of the Power of Siberia 2 project.

— What prevents the parties from moving forward even in such a situation on the global gas market?

— There are doubts on both sides about this project. In particular, China does not know whether it will need Russian gas in such large volumes. And Gazprom needs the maximum capacity of the gas pipeline to make the project profitable.

The declared design capacity of the Power of Siberia 2 is 50 billion cubic meters per year. Perhaps a small part of these, — 3-4 billion — will be taken by Mongolia, through which the gas pipeline will pass, and even that is not a fact. In any case, China should account for at least 45 billion. These are large volumes even on the scale of the Chinese market.

To start construction, Gazprom would like to have legally binding guarantees that China will buy these volumes over a long period of time. This is a normal practice for the energy sector, including the gas market, especially when it comes to such capital-intensive projects.

But China does not want to make such commitments, at least for today. Most likely, it could subscribe to 20 billion cubic meters per year or a little more, but it is not ready to guarantee 45-50 yet.

— What does it depend on?

— It depends on a number of factors, including what kind of production will be in China. It is itself one of the largest gas producing countries. Its indicators are also growing, but they are not enough to cover the fast-growing market. It is unclear how the situation will change in 10 years and later.

At the same time, China already signed up last year to increase supplies via the first Power of Siberia gas pipeline from 38 billion cubic meters per year to 44 billion, as well as via the Far Eastern route, which is scheduled to be launched by the end of 2027.

— And what doubts does the Russian side have?

Dependence on one importer entails a high risk: it gains additional market power and can dictate terms. In the case of China, which is known in the world as a very difficult and tough negotiator, this is all the more risky. The project has been criticized many times for this.