On September 2, 2025, a significant chapter in Eurasian energy diplomacy was written in Beijing as leaders from China, Mongolia, and Russia gathered for their seventh trilateral summit. The meeting, held on the heels of the 2025 Shanghai Cooperation Organization (SCO) Summit in Tianjin, brought together Chinese President Xi Jinping, Russian President Vladimir Putin, and Mongolian President Khurelsukh Ukhnaa. The main headline from the summit was the announcement by Gazprom CEO Alexei Miller that a "legally binding memorandum" had been signed for the long-discussed Power of Siberia 2 (PoS-2) natural gas pipeline—a project with the potential to reshape energy flows across the region.
According to Interfax, Miller declared in Beijing that Gazprom and China’s CNPC had reached a formal agreement to move forward with PoS-2. The planned pipeline would stretch approximately 1,400 kilometers (with some sources citing 962.9 kilometers for the cross-border segment), delivering up to 50 billion cubic meters of Russian natural gas annually from the Yamal Peninsula, through Mongolia, and into northern China. The announcement was quickly echoed by the Office of the Mongolian President, which stated that the three parties "affirmed their commitment to implementing a project for the construction of a natural gas pipeline from Russia to China via Mongolian territory."
This breakthrough, however, comes with caveats. While Russian and Mongolian officials trumpeted the deal, Chinese government agencies and state media remained conspicuously silent, suggesting that negotiations are still ongoing and the project’s final contours remain uncertain. As the Atlantic Council observed, "the Chinese side has not yet confirmed this news, suggesting that the pipeline is not, in fact, finalized." The ambivalence from Beijing raises questions about the true momentum behind the project and whether it will advance with the urgency Moscow hopes.
The Power of Siberia 2 pipeline, if realized, would supplement the existing Power of Siberia pipeline—a 3,000-kilometer artery that already brings Russian gas into China’s Heilongjiang province. Gazprom’s Miller also announced additional capacity expansions: 8 billion cubic meters per year across the first Power of Siberia pipeline and the Far Eastern Route. These incremental increases, while less dramatic than a single megaproject, could cumulatively approach the scale of another major pipeline, as noted by energy analysts. This "Moneyball approach," as described by the Atlantic Council, could see Russia and China achieving significant gas trade volumes via a patchwork of smaller deals.
For Russia, the stakes are high. Three and a half years into the war in Ukraine, the Russian economy has proven more resilient than many predicted, buoyed by nonliquid assets and over $200 billion in central bank reserves. Yet, the long-term outlook is clouded by a shrinking labor force, the prospect of softer global oil prices, and the challenges of transitioning away from a war economy. Securing a thirty-year export commitment with China for up to 50 billion cubic meters of gas annually would not only provide a crucial revenue stream but also send a signal to both European and Asian markets that Moscow has alternatives—potentially giving Russia more leverage in postwar negotiations with European buyers.
"It took 30 years for Mongolia to be at the negotiation table on this matter," former Mongolian Foreign Minister Tsogtbaatar Damdin remarked, highlighting the diplomatic persistence required to bring Mongolia into such a central role. The pipeline’s route through Mongolian territory is a testament to Ulaanbaatar’s growing importance in regional energy dynamics and its successful pursuit of a multipillar foreign policy. President Khurelsukh, speaking at the SCO Summit, underscored Mongolia’s commitment to "peace, multilateralism, and regional integration," and pointed to the extension of the China-Mongolia-Russia Economic Corridor Program until 2031 as evidence of deepening ties.
Yet, while Russia is eager—perhaps even desperate—to ink the pipeline deal, China’s enthusiasm is more muted. As the Atlantic Council reported, "there appears to be considerable ambivalence in Beijing." The Chinese government has not made any authoritative statements about the so-called "Western natural gas pipeline," and the lack of public information about contract terms leaves many details in the dark. Financing remains a major sticking point: during the first Power of Siberia negotiations, Gazprom sought a large Chinese prepayment to fund the Russian section, but Beijing resisted, leaving Gazprom to shoulder the burden. With PoS-2 being even longer and larger, the financing risks are expected to fall even more heavily on Russia.
Moreover, the pipeline’s economic rationale is less clear-cut than it might seem. PoS-2 would mainly serve northern China, where gas demand is driven by industry and heating, not power generation. However, China is rapidly advancing alternative technologies—such as heat pumps, batteries, and electric vehicles—that could curb future demand for natural gas. The Atlantic Council highlighted that "Chinese natural gas demand in industry is also likely to face pressure, as recent analyses show battery electric vehicles making headway even in the heavy-duty vehicle sector." With China’s central government pushing for greater electrification and coal-to-electricity switching, the growth prospects for natural gas in heating and transport are increasingly limited.
Despite these headwinds, Russia continues to expand its energy relationship with China and the broader region through a series of smaller deals. In February 2022, a 10 billion cubic meters per year contract was signed for the Russia-to-China Far Eastern Route, and Russian net exports to Central Asian countries have more than doubled since the start of the Ukraine war. These arrangements, while less headline-grabbing than PoS-2, are cumulatively significant. As the Atlantic Council noted, "Russia’s exports to Central Asia may support the region’s shipments to China, although this relationship is not one-for-one." On the oil front, China agreed to purchase 100 million tons of Russian crude over ten years, with an additional 2.5 million tons per year added this week.
For Mongolia, the trilateral summit and the pipeline memorandum represent a diplomatic and economic milestone. Foreign Minister Battsetseg Batmunkh described the meeting as bringing "significant progress in implementing Mongolia’s multipillar foreign policy and developing mutually beneficial and stable cooperation with neighboring countries." The "Transit Mongolia" vision, which promotes deeper connectivity through railroads, energy, and gas pipeline projects, was also advanced at the summit, positioning Mongolia as a vital transit hub between its two powerful neighbors.
From a Western perspective, these developments are being watched closely. While the prospects for PoS-2 remain uncertain, even the incremental expansion of Russian gas exports to China could constrain US and European LNG exporters and reduce Beijing’s reliance on Western energy. The Atlantic Council warned that "any further natural gas tie-in risks prolonging the war in Ukraine by sustaining Russia’s economy and bolstering Putin politically," and suggested that Washington and Brussels consider targeted sanctions against Russian and Chinese energy firms involved in such projects.
As the dust settles from the summit, one thing is clear: the Power of Siberia 2 pipeline—whether realized in full or in part—has already become a focal point for the shifting alliances and economic strategies that define the region. With Mongolia stepping confidently onto the energy stage, and China and Russia navigating a complex web of cooperation and competition, the next moves in this high-stakes game will be watched around the world.
