The "Power of Siberia 2" Illusion: Why Putin’s Gas Deals in China Are Doomed to Fail

Russian dictator Vladimir Putin's official visit to Beijing has triggered a wave of Kremlin propaganda celebrating an alleged "eternal brotherhood" and imminent "contracts of the century." However, behind the grand headlines lies a starkly different reality for Russia's energy sector. For over a decade, Gazprom has aggressively lobbied for the "Power of Siberia 2" project—a massive pipeline intended to redirect 50 to 100 billion cubic meters of natural gas annually from Western Siberia to China as an alternative to the lost European market. Yet, despite claims by Russian state media in late 2025 that a contract was signed, Beijing has remained completely silent, and no actual project progress has materialized.

According to independent economic analyst Vladimir Milov, the Power of Siberia 2 pipeline is financially unviable and structurally unnecessary for China. Even pro-Kremlin experts concede that if a contract were signed today, the infrastructure would not reach full capacity until 2033–2035. Additionally, drawing gas from Western Siberian fields requires thousands of kilometers of new pipelines, driving profitable price thresholds up to $400–$500 per 1,000 cubic meters. Meanwhile, China refuses to buy Russian gas unless it is heavily discounted.

Furthermore, Gazprom’s financial health has deteriorated significantly. Despite achieving record delivery volumes to China via the existing Power of Siberia 1 route, the state corporation's profits collapsed close to zero in the latter half of 2025. Gazprom requested direct construction subsidies for the second pipeline from the Russian Ministry of Finance but was flatly rejected due to widening budget deficits. Attempts to access Chinese financial markets through "Panda bonds" also failed, as Chinese investors completely avoid toxic, sanctioned Russian entities.

The underlying reason for Beijing's reluctance is its rapid green energy transition. The country installs more solar and wind capacity annually than Russia’s entire power grid possesses, reducing natural gas to less than 5% of China's electricity generation mix. Furthermore, the Chinese Ministry of Natural Resources discovered 26 massive domestic gas fields over the past five years, positioning China to outpace major global producers like Qatar by 2030.

For a deeper analysis of the fictional nature of Russia's energy pivot to Asia, watch the full report by Vladimir Milov on YouTube.

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