“Shock To Global Seaborne Gas Trade”: China-Russia Pipeline Seen Displacing One-Third Of LNG Imports

By Charles Kennedy of OilPrice.com

China’s planned Power of Siberia 2 pipeline with Russia could displace the equivalent of one-third of the country’s LNG imports and deliver a “shock” to the global seaborne gas trade, according to analysts cited by the South China Morning Post (SCMP).

The 50-billion-cubic-meter-per-year conduit, slated to run through Mongolia, would lock in long-term Russian pipeline supply and sharply cut China’s need for LNG cargoes just as global exporters scale up capacity.

The warning follows Sunday’s signing of a binding memorandum between Moscow and Beijing. Russian President Vladimir Putin and Gazprom chief Alexei Miller presented the deal in Beijing as a centerpiece of their energy partnership.

While intent has been formalized, key commercial details such as pricing and financing remain unsettled, with analysts describing the accord as a demonstration of strategic alignment between the two nations, underscoring Russia’s eastward pivot after Europe halted most pipeline purchases.

Chinese media continue to emphasize the sheer scale of the shift. Sina Finance reported Gazprom’s plans to expand existing Power of Siberia flows from 38 to 44 bcm annually, and Far East volumes from 10 to 12 bcm, alongside the new Mongolian line. QQ.com highlighted Beijing’s view of the project as insurance against volatile LNG markets and leverage in negotiations with U.S. and Qatari suppliers.

The initiative is part of a “new gas world order,” with pipeline deals reinforcing China’s long-term bargaining power in energy.

Analysts from Barron’s and Columbia University’s Center on Global Energy Policy have warned that U.S. LNG exporters could lose market share in Asia if China secures more Russian volumes, with the pipeline reducing spot demand and softening growth trajectories for American cargoes.

If Power of Siberia 2 is built on schedule, it would provide China with fixed-price, long-distance pipeline gas at volumes comparable to major LNG supply deals.

That shift could cap demand growth for new liquefaction projects targeting Asia, forcing U.S., Qatari, and Australian exporters to compete more aggressively for the remaining market.

Traders told Bloomberg that such a rebalancing would ripple through long-term contract negotiations now underway, reshaping LNG investment decisions well into the 2030s.