Beijing prefers gas pipeline from Turkmenistan to Putin’s “Siberian” project

Attempts by Russian President Vladimir Putin to negotiate an increase in gas supplies to China have stalled, The Moscow Times reports citing Reuters.

Instead of the 50 bcm Power of Siberia 2 project that the Kremlin has been pushing for over 7 years, Beijing has decided to prioritize a new gas pipeline from Turkmenistan.

Although Turkmen gas costs China 30% more than Russian gas, and negotiations on a discount with Ashgabat failed, Beijing gave the green light to the Line D project, which will import 30 billion cubic meters from Turkmenistan annually.

State oil and gas corporation CNPC last week began developing a feasibility study for a 200-kilometer interconnector from Xinjiang’s border with Kyrgyzstan to the Chinese city of Wujia as the first point of entry, according to a senior Reuters source.

“This means that line D is being prepared,” the source said, adding that the construction of an internal highway in China could begin as early as next year.

In 2022, through three existing pipelines, China imported 35 billion cubic meters of gas from Turkmenistan, paying $10.3 billion for it. Russian deliveries through the Power of Siberia launched in 2019 amounted to 16 billion cubic meters, and their cost was 2.5 times lower – about $4 billion.

At a meeting with Chinese President Xi Jinping in the Kremlin in March, Russian President Vladimir Putin proposed increasing gas flows 6 times to 98 billion cubic meters a year. However, the conclusion of the long-awaited gas contract did not follow. A visit to China by Russian Prime Minister Mikhail Mishustin, who was tasked with expanding economic ties, did not change the situation either.