MOSCOW (Reuters) -Russian President Vladimir Putin said on Wednesday that the planned new Power of Siberia 2 gas pipeline would give competitive benefits to China because the world's biggest energy
Putin Highlights Competitive Edge for China from New Gas Pipeline
Impact of the Power of Siberia 2 Pipeline
BEIJING (Reuters) -Russian President Vladimir Putin said on Wednesday that the planned new Power of Siberia 2 gas pipeline would give a competitive advantage to China because the world's biggest energy consumer would get gas at a price lower than Europe's.
Details of the Pipeline Agreement
Russia and China gave their blessing to the vast pipeline project with a binding memorandum signed during Putin's visit to China, but little is known about the key details of the pipeline and Gazprom said that pricing was yet to be agreed.
Economic Implications for China
"Finally, the negotiating parties found a consensus," Putin told reporters in Beijing when asked about the Power of Siberia 2 agreement. "There is no charity on either side – these are mutually beneficial arrangements.
Russia's Natural Gas Supply Strategy
"And, by the way, the price of this product is also formulated not based on current prices, but according to a certain formula, and this formula is purely objective – and market-based," Putin said.
The pipeline, which could one day deliver an additional 50 billion cubic metres (bcm) of gas per year to China through Mongolia from the Arctic gas fields of Yamal, gives China greater options to hedge against any future reliance on U.S. liquefied natural gas.
After the pipeline is built, Russia would supply a total of over 100 billion cubic metres (bcm) of gas per year to China, Putin said.
The so-called "no limits" partnership between China and Russia, the world's biggest producer of natural resources, has strengthened since the West imposed sanctions to punish Russia for the war in Ukraine.
"The growing Chinese economy has needs, and we have the opportunity to supply these raw materials," Putin said, adding that talks had gone on for years.
"Of course, this will create competitive advantages for our Chinese friends, because, I repeat, they will receive the product at balanced market prices, not at the inflated prices that we are currently seeing in the euro zone," Putin said.
"Everyone is satisfied, everyone is happy with this result, to be honest, and so am I."
(Reporting by Reuters; Editing by Guy Faulconbridge, Mark Trevelyan and Hugh Lawson)
