The Power of Siberia-2 is back in force. Why China will need not one gas pipeline, but two

Alexey Gromov, Principal Director on Energy studies at the Institute for Energy and Finance, commented to the Chemical Aggregates industry magazine on China's decision to resume negotiations with Turkmenistan, the construction of the fourth branch of the West-East gas pipeline, as well as the chances of launching the Power of Siberia-2 gas pipeline.

Trapped in a gas trap: why is the supply paradigm to China changing?

— We are now seeing a problem not only in the Middle East related to the closure of the Strait of Hormuz, we have also heard statements from the US presidential administration that if the situation with the Strait of Hormuz is not resolved quickly, the United States may consider restricting navigation through the Strait of Malacca near Singapore, where the main routes for the delivery of oil to China pass, as pressure on China, which obviously supports Iran in the conflict," Alexey Gromov explains the balance of interests.

In this situation, the Chinese leadership has no other way but to build an infrastructure independent of the United States and ensure uninterrupted supplies. For a long time, money was a deterrent. Yes, Russian gas through a new pipeline is the cheapest offer China has on the table. Blue fuel from Central Asia is more expensive, but the Chinese get full control because they build all the infrastructure themselves. Both projects have a common disadvantage: pipes enter China in the northwest, while consumers are located in the east. China will have to build three thousand km of gas pipeline itself, which significantly increases the cost.

But it seems that the geopolitical risks outweigh the economic costs.

Power of Siberia - 2 and the D-Line: competitors or not?

— The D branch project exists, it will be possible to build it quickly enough, because it will actually run parallel to the previous three branches of the gas pipeline that connect Central Asia with China. It is quite possible to implement this project in a couple of years, especially since China will do it on the basis of its own investments with the involvement of its own contractors from among Chinese companies. It is not difficult for China to implement the project here, although the problem of resource availability and future occupancy of this pipe remains. In recent years, we have not seen any new large reserves of natural gas found in Turkmenistan," Alexey Gromov recalls.

What options does Gazprom have for Chinese supplies

China will rely on more reliable pipeline supplies. In addition, the proposal announced by Gazprom when signing the memorandum on the construction of the Power of Siberia—2 in September 2025 is 20-25% cheaper than gas supplies from Central Asia. This inspires optimism, the expert believes.:

— I think that this year we should expect progress, and possibly the conclusion of a commercial contract for gas supplies through the Power of Siberia —2. However, this is not a quick matter. If the Turkmen pipeline can be ready in 2 years, there is still no contract for the Power of Siberia—2. Even if it is signed in May during the visit of the Russian president to Beijing, the gas pipeline will not work sooner than in 4 years. Then Gazprom may have a backup option.

Since Soviet times, there has been a Central Asia-Center gas pipeline system. It was built to pump Turkmen gas to central Russia. The pipelines are currently operating in reverse mode and supply Russian gas to Kazakhstan and Uzbekistan. Potentially, its bridges can be connected to Chinese pipes from Turkmenistan. But in this case, it is necessary to obtain the consent of Ashgabat, and this is not easy, the expert believes:

— Turkmenistan is a key supplier from Central Asia, which traditionally has a difficult, competitive relationship with Russia in terms of gas supplies. We have not worked out such issues with Turkmenistan until recently. We can fill these pipelines with Russian gas, but given the range of transportation, this gas will be expensive for China, as will Central Asian gas. In this regard, I do not think that this is of commercial interest to China and Russia. It's easier to build a new pipe.