Russia said it's pushing ahead with building a massive natural-gas pipeline to China as Western sanctions rock its economy

Russia said it's pushing ahead with building a massive natural-gas pipeline to China as Western sanctions rock its economy
The proposed pipeline would deliver up to 1.77 trillion cubic feet of Russian gas each year to China via Mongolia, Gazprom said.Xinhua/Ju Peng via Getty Images, Sergei Guneyev/SPUTNIK/AFP via Getty Images
  • Russia's Gazprom said Monday that it signed a contract to design a natural-gas pipeline to China.
  • It said the pipeline would deliver up to 1.8 trillion cubic feet of natural gas a year via Mongolia.

Russia is pushing ahead with plans to build a massive pipeline carrying natural gas to China as Western sanctions strangle its economy.

Gazprom, the Kremlin-controlled energy giant, said on Monday that it had signed a contract to perform design and survey work as part of the construction of the Soyuz Vostok gas pipeline.

Gazprom said the proposed pipeline would deliver up to 50 billion cubic meters, or 1.8 trillion cubic feet, of Russian natural gas each year to China via Mongolia.

Bloomberg reported that if plans for the pipeline were to go through, it could be Gazprom's biggest-ever deal with China.

Countries and trade blocs including the European Union, the UK, the US, Canada, and Japan have responded to Russia's invasion of Ukraine with sanctions designed to hobble Russia's economy.


The measures have targeted its banking system and trade, among other areas, and have led to a slump in the ruble, a huge hike in interest rates, and rising inflation.

But, crucially, the West hasn't banned Russian energy imports. Europe gets about 40% of its natural-gas supply from Russia and has continued to rely on it since the invasion started.

China, meanwhile, has avoided criticism of Russia's move into Ukraine and refrained from calling Moscow's actions an invasion. China is Russia's biggest trade partner for exports and imports, and it bought a third of Russia's crude-oil exports in 2020, Reuters reported, adding that China supplies Russia with products like phones, toys, and clothing.

The Soyuz Vostok link could offer Russia better access to alternative markets in the East as energy majors in the West announced they would divest themselves of Russian interests. Shell said on Tuesday that it was pulling out from its joint ventures with Gazprom and related businesses, while BP said it was dumping its 20% stake in the Russian state-backed oil firm Rosneft.

Germany also halted plans for the Nord Stream 2 pipeline, designed to carry gas between Russia and mainland Europe, though the German energy firm E.ON said it had rejected calls to shut down the Nord Stream 1 pipeline, which pumps Russian natural gas to Europe.


Bloomberg reported that if Russia and China were to reach a new supply deal, Gazprom could build an interconnector between its westbound and eastbound pipeline systems, allowing it to divert gas from fields that currently supply only Europe to China.

Gazprom said that Alexey Miller, the chair of the Gazprom Management Committee, and Sainbuyan Amarsaikhan, the deputy prime minister of Mongolia, discussed the Soyuz Vostok project at a meeting on Monday.

The Soyuz Vostok is also known as the Power of Siberia 2 pipeline. The Power of Siberia 1 pipeline has been pumping natural gas from Russia to China since 2019 as part of a 30-year, $400 billion deal, Bloomberg reported.