China and Russia agree bombshell gas pipeline deal in huge blow to Donald Trump

China and Russia have agreed a new deal to build a huge gas pipeline as their bond continues to strengthen. The Power of Siberia 2 pipeline will carry an extra 50 billion cubic metres of gas from Russia's Arctic Yamal fields to China via Mongolia every year.

The deal was announced by Russia as Vladimir Putin met with Chinese President Xi Jinping in Beijing on Tuesday (September 2). Alexei Miller, CEO of Gazprom, the largest energy firm in Russia, confirmed that a "legally binding memorandum" had been signed to move forward with the pipeline. The move is set to reduce China's dependence on liquefied natural gas (LNG) imports from the United States, in a huge blow to Donald Trump.

As reported by Financial Times, Mr Miller added: "Talks will now focus on financing the pipeline's construction and the commercial terms of supply." Although details on pricing were not released, he promised to "provide the commercial details" separately.

The gas deal is expected to run for 30 years and marks a shift in the global market. Russia is the largest supplier of pipeline gas to China, and the third largest provider of LNG to Beijing after Australia and Qatar.

Moscow and Beijing are also set to increase gas supplies through existing routes by 8 billion cubic metres. They aim to bring the total annual flows to 56 billion cubic metres before the new pipeline is built.

However, the total 106 billion cubic metres of gas being transported from Russia to China after the launch of the Power of Siberia 2 is around half the number it supplied Europe before the invasion of Ukraine. According to Gazprom, Moscow supplied around 200 billion cubic metres before the war started.

Although Chinese state media did not mention the gas deals, they quoted Xi as saying: "'Hard connectivity' should be a key direction, by actively promoting cross-border infrastructure and energy projects linking the three countries."

Meanwhile, Victor Gao, chair of the China Energy Security Institute, said the announcement from Russia was "a bit premature". He added: "This may be more (a signal) of their intent rather than an agreement already reached."

Alexander Gabuev, director of the Carnegie Russia Eurasia Center in Berlin and a China expert, said the expansion of the existing pipelines appeared to be "a real deal" but added: "A legally binding memorandum without a price or timeline is not a final agreement."