Putin: Gas pipeline from China to Russia will benefit both countries, calculate price using market formula

The Russian President Vladimir Putin stated on Friday that Power of Siberia 2 was a "mutually-beneficial project". He also said the price of gas would be determined by a formula similar to those used to supply gas to Europe.

Russia proposed this route years ago. However, the plan is now more urgent as Beijing has been identified as the best alternative to Europe. Europe wants to reduce its dependence on Russian energy due to Moscow's invasion of Ukraine in 2022.

Russia and China signed an agreement to build the pipeline on the occasion of Putin's China visit this week. However, Russian energy company Gazprom said that pricing had not yet been agreed. The company aims to begin delivering gas through the pipeline in 2030.

Putin said at a Vladivostok economic forum that this is the largest energy project in the world.

He said that the price "would be calculated using the same formula for deliveries to Europe... The price is based on the market.

Since the beginning of the conflict in Ukraine, Russia has lost the majority of its gas markets in Europe.

Zandanshatar Gombojav of Mongolia, whose country will be the route for the new pipeline, said at the same event, that Ulaanbaatar is ready to move forward, but details need to be worked out.

He said that Mongolia could buy some Russian gas.

(source: Reuters)