Tashkent, Uzbekistan (UzDaily.com) – On 25 August 2020, a video conference was held with the participation of the Chairman of the Board of Gazprom A. Miller and the Prime Minister of Mongolia U. Khurelsukh.

During the talks, the parties discussed the prospects for cooperation in the implementation of the Power of Siberia-2 gas pipeline from Russia to the PRC through Mongolia, and also signed a memorandum on the establishment of a special-purpose company.

The company will be established to develop a feasibility study for the project, construction and operation of the main gas pipeline. The cost of this gas pipeline may reach US$10 billion, and the capacity - about 50 billion cubic meters of gas a year.

In 2015, Gazprom and the Chinese company CNPC signed an agreement on the basic conditions for pipeline gas supplies from fields in Western Siberia to China via the Power of Siberia-2 gas pipeline (the “western” route).

Initially, it was assumed that the "western" route would be laid directly from the fields from Russia to western China through Altai. However, this option still proved to be unprofitable and technically more complicated. The option of building a gas pipeline through Mongolia looks less risky, but it will be longer. In this case, Gazprom also gets a potential opportunity to sell gas in Mongolia.

Experts believe that the new gas pipeline will become the second important route for gas supplies from Russia to China after the Power of Siberia, which was launched in December 2019. According to experts, in the next 10-15 years, China will be supplied with 38 billion cubic meters gas per year via the “eastern” route (“Power of Siberia”), 50 billion cubic meters per year via the “western” route (“Power of Siberia-2”) and via the international gas pipeline from Sakhalin Island. The Power of Siberia-2 gas trunkline will also connect the gas transmission system of the European part of Russia with Eastern Siberia.

In general, observers note that the construction of the Power of Siberia - 2 gas pipeline through Mongolia will allow Russia not only to increase gas exports to China and increase economic profit, but also to sell gas in Mongolia itself. At the same time, experts note the risks associated with the coronavirus pandemic and the oversupply of LNG observed in the world, which may complicate the situation with the sale of Russian pipeline gas.