Power of Siberia 2: Deal or no deal?

There is a good strategic case for China to sign a deal for gas supplies via the proposed Power of Siberia 2 pipeline, but Beijing’s concerns around over-dependence on a single supplier and desire to drive down the price make it relatively unlikely a contract will be finalised this year

Russian President Vladimir Putin will arrive in China on August 31 for a rare four-day state visit. A number of diplomatic and economic deals between the two countries will likely be ceremoniously signed before the event ends. The largest of these could be the giant Power of Siberia 2 gas contract, long under negotiation but only now, perhaps, becoming sufficiently attractive to the Chinese side. That China needs ever-rising amounts of imported gas is not in dispute, but the source of that extra gas is uncertain. As it so happens, Russia, having lost most of its European gas franchise, has a substantial amount of excess production capacity available for sale. The Power of Siberia 2 project w