The details of the new Sino-Russian gas pipeline project have not been agreed, and the construction plan may be delayed, and Mongolia intends to expand economic and trade exchanges with China.
According to the Russian Satellite News Agency, Russian Deputy Prime Minister Novak said that an agreement in principle has been reached on the "Power of Siberia 2" pipeline, and that Gazprom and China National Petroleum Corporation are currently conducting final deliberations on the economic and commercial terms of the project. Prices, delivery methods, payment methods are still being discussed, these are important issues that need to be handled with care. It is reported that design work on the gas pipeline project began as early as 2020, and the branch line of its "Eastern Union" pipeline should pass through Mongolia. The total length of the pipeline is about 6,700 kilometers, and the transportation capacity can reach 50 billion cubic meters per year.
However, Mongolian Prime Minister Oyun Erden told the Financial Times that Russia's gas pipeline connecting China was scheduled to be laid this year, but the start may be delayed. The pipeline project has been a priority for Moscow for more than a decade, especially after the outbreak of the Russia-Ukraine war and the sabotage of the Nord Stream 1 pipeline, which transports Russian gas to Europe. Nearly 1,000 kilometers of pipelines are expected to cross Mongolian territory, and construction was expected to begin in 2024. Oyun Erden revealed that the fluctuation of global natural gas prices in the past two years has made the negotiations between the two sides more complicated. At present, the two countries have not been able to agree on the key details of the project, and the two sides are still calculating and evaluating the economic benefits. Russian Deputy Prime Minister Novak previously wrote that the timetable for the construction of the pipeline would be finalized after a binding agreement was signed with China. Compared with the Power of Siberia 1 project, the 2nd project has a stronger delivery capacity.
Earlier, Mongolian Prime Minister Oyun Erden told the South China Morning Post at the Davos Economic Forum that Mongolia is conducting a feasibility study to further strengthen participation in the "Belt and Road" project. Their diplomatic department has also sought cooperation through diplomatic channels to arrange a summit between China and Russia, but the exact date has not yet been set. China's proposed China-Mongolia Economic Corridor is part of the Belt and Road Initiative (BRI) to facilitate infrastructure connectivity and trade and investment flows within the region. He also said that Mongolia is ready to connect to the Power of Siberia-2 gas pipeline. However, it is currently waiting for China and Russia to complete a detailed study, and it is believed that the project will be launched soon once it is confirmed. The Mongolian Prime Minister also stressed that the current relations between China and Mongolia are at the highest level.
According to Chinese customs statistics, the value of Mongolia's exports to China increased by 40% year-on-year to US$13.1 billion last year, while the value of goods imported from China increased by 25% to US$3.5 billion, which shows that bilateral trade is developing rapidly. China is Mongolia's largest trading partner and has considerable economic influence. At the beginning of last year, Mongolia's deputy prime minister said during his attendance at the Boao Forum that if China's economy could grow by 5 percent, then Mongolia's economy was expected to grow by 7 percent. In 2022, Mongolia's total foreign trade was US$21.2 billion, of which trade with China accounted for 64.3%. Most of Mongolia's coal, copper, iron ore and other resources are exported to China. In addition, under the influence of the Belt and Road Initiative, Mongolia's railway and highway infrastructure has been significantly improved, and the number of countries with which trade has also increased significantly. From this point of view, China has a great influence on Mongolia in the economic field. At present, Mongolia is also planning to build a dry port to attract Chinese tourists, which is expected to enhance the economic and trade relations between the two countries.
As for the question of whether the energy artery is safe to pass through Mongolia, the current Sino-Russian relations have reached an unprecedented level, and the economic and trade relations between China and Mongolia are gradually deepening.