MediumI Geo-Economics & Chokepoints2 September 2026, Wednesday

With the price dispute unresolved, Putin renames the planned Power of Siberia 2 pipeline to China 'Power of Baikal'

Energy Minister Tsivilev told the Eastern Economic Forum that the 2,600 km line, with a capacity of 50 billion m³ a year, is at the 'final stage' before construction. However, price negotiations between Gazprom and CNPC have still not concluded.

Russian Energy Minister Sergei Tsivilev announced at the Eastern Economic Forum in Vladivostok on 2 September 2026 that Putin had renamed the planned Power of Siberia 2 pipeline as Power of Baikal. Tsivilev said the project was at the final stage before moving to construction. According to Pipeline & Gas Journal, the pipeline will run about 2,600 km from Arctic fields in Yamal via Mongolia to China and carry 50 billion cubic metres of gas a year. The existing Power of Siberia 1 pipeline carried 38 billion cubic metres of gas to China last year. Deputy Prime Minister Novak said on 4 September that the two countries had agreed to accelerate negotiations.

Pipeline Technology Journal stresses that the renaming was not accompanied by any technical or financial development and that the delay stems from a dispute over the price formula. According to Russia's Pivot to Asia, Russia's energy sales to China rose by more than 20% in the first seven months of 2026 to over 50 billion dollars, and oil shipments rose by 25%. As Russian gas, having lost the European market, becomes more dependent on China, pricing power remains with Beijing. This is an unfavourable picture for a Russian budget with shrinking revenues. 318 agreements worth a total of about 7 trillion roubles were reported to have been signed at the forum.

Talay assessment

Bottom line

The renaming underlines political ownership of the project but brings no technical or commercial progress; the decisive obstacle remains the price formula between Gazprom and CNPC. With Russia's bargaining power weakened by the loss of the European market, a deal can come only over time and on terms favouring Beijing. The most likely path is continued negotiations without a binding price agreement in the near term.

Likely effects

Russian budget and gas revenueNegative6 months+
With pricing power resting in Beijing, Russian gas redirected to China earns less than in the European era; pressure on a budget with falling revenue persists over the extended horizon.
Türkiye and the Eurasian gas balanceUncertain1–6 months
Delays to the China line keep Russia reliant on remaining large buyers such as Türkiye for its post-Europe gas exports, which may preserve Ankara's room for manoeuvre in price and terms negotiations.

Possibilities, ranked

1
Negotiations continue without a price75%
The sides signal acceleration, but no binding price formula or construction start is announced.
Watch: Senior-level meetings producing only general memoranda, and no final Gazprom–CNPC contract.
2
Deal on terms favouring Beijing15%
Russia concedes on price, a final contract is signed and a construction timetable is announced.
Watch: Signing of a final sales contract between Gazprom and CNPC and announcement of a construction start date.
3
Project effectively shelved10%
China prioritises alternative supply sources and negotiations freeze for an extended period.
Watch: Reports that preparations along the Mongolian route have stopped, or large-scale alternative gas deals by China.

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Bottom line

Likely effects

Possibilities, ranked

Sources