Putin courts Xi in effort to pull off geopolitical "coup"
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All eyes are turned eastward as Russia tries to convince China to back the long-proposed Power of Siberia 2 gas pipeline.
Why it matters: As Russian President Vladimir Putin meets with Chinese leader Xi Jinping during a two-day state visit, the market and geopolitical stakes are huge — especially following the massive decline in Russian gas flows to Europe since the invasion of Ukraine.
State of play: Initial reports from the visit show no explicit progress on winning Xi's endorsement of the project, but vows of deeper energy ties.
- The New York Times reports that Putin said the "leaders discussed working more closely in energy and nuclear power research, though made no mention of a proposed natural gas pipeline to China that Moscow would like to see built."
The big picture: A new commentary from analysts with Columbia's Center on Global Energy Policy explores why it's so vital for Putin.
- PS-2 would be a geopolitical "coup" for Moscow, not just a revenue stream, because it tightens its strategic alliance with China.
- It would mean "demonstrating to the West and the Global South that it is able to deepen its energy relationship with China despite the war."
Friction point: "One reason China is in no hurry to finalize an agreement for PS-2 is that the country is unlikely to need the gas before the mid-2030," CGEP's analysts write. That gives it leverage on price and more.
Yes, but: While Xi is likely to continue what have been years of playing hard to get, his posture could change, they add.
- "[I]f China can secure an attractive price for PS-2 gas, and if China's relations with the United States continue to deteriorate, Beijing could be motivated to reverse course."
Zoom out: A 2030 link to supply what's now 50 billion cubic meters of stranded Russian gas would displace a chunk of China's liquefied natural gas imports, adding to an expected LNG glut as more projects come online this decade.
The bottom line: If there's ever a deal, the market and geopolitical implications are global.
