LNG: Power of Siberia 2 Gas Deal Looks in Doubt

The proposal to further boost Russia’s gas exports to China via a new pipeline called Power of Siberia 2 (PoS 2) looks in doubt, according to Eurasianet, cited by Bloomberg.

• Just a few months ago, Russian and Chinese officials said a deal was imminent, but plans look like they are now on hold.
• Mongolia’s decision not to include pipeline funding in its recent five-year plan was seen as an indicator that China is getting cold feet towards the project, according to the South China Morning Post.
• PoS 2 was projected to carry 50 bcm/y of natural gas from Western Siberia to China. 
• PoS 2 would have provided an outlet for Russian gas as it loses access to the European pipeline gas market and Arctic LNG 2 is under sanctions.
• Eurasianet said that a China-Turkmenistan pipeline makes more sense for Beijing as it hands it more control over construction and operations.
• a Russia-China gas deal was never a ‘shoe in’. China has rapidly expanded its LNG capacity, cutting the necessity for pipeline flows. Nor does it want to be over reliant on one supplier.