Gazprom's Resumption of Full Capacity on the Power of Siberia Pipeline: A Geopolitical Energy Shift and Global Gas Market Implications

Gazprom's recent announcements regarding the Power of Siberia Pipeline (PoS-1) and the newly signed Power of Siberia 2 (PoS-2) project mark a pivotal moment in global energy geopolitics. As of September 2025, PoS-1 has increased its capacity utilization from 38 billion cubic meters (bcm) to 44 bcm annually, while PoS-2—a $100 billion infrastructure project—has been formalized to add 50 bcm of gas supply to China over 30 yearsPower of Siberia 2: Russia signs new gas pipeline deal with China^[1]. This dual-track strategy underscores Russia's strategic pivot to Asia, reshaping energy markets and challenging the dominance of European and U.S. LNG exports.

Geopolitical Energy Resilience: Russia's Pivot to China

The Power of Siberia 2 pipeline, spanning 2,600 kilometers from western Siberia to northern China via Mongolia, is more than an infrastructure project—it is a geopolitical recalibration. According to a report by The Moscow Times, the deal, signed by Gazprom and China's CNPC, reflects Russia's intent to offset declining European gas sales due to sanctions and geopolitical tensionsWhat the Power of Siberia 2 Deal Really Means for Russia and China^[2]. By 2025, China has already increased its reliance on PoS-1 from 38 bcm to 44 bcm annually, signaling a long-term shift toward pipeline gas as a stable, cost-effective alternative to volatile LNG marketsHow the Trade War is Reshaping the Global Economy^[3].

This pivot strengthens Russia's energy resilience while enhancing China's energy security. As noted by the Center for Strategic & International Studies (CSIS), China's growing LNG import dominance—currently dominated by suppliers like the U.S., Qatar, and Australia—faces a potential counterbalance with PoS-2Power of Siberia 2: Redefining Energy Geopolitics^[4]. The pipeline reduces China's exposure to global LNG price fluctuations and geopolitical risks, such as U.S. sanctions on Russian energy, while securing a steady supply from one of the world's largest gas reserves.

Market Dynamics: Pricing, Currency, and U.S. LNG Challenges

The economic implications of PoS-2 are complex. Gazprom CEO Alexei Miller has emphasized that pricing negotiations remain unresolved, with Russia seeking profitability and China pushing for rates closer to domestic costsPower of Siberia 2: Russia signs new gas pipeline deal with China^[1]. This tension highlights the pipeline's dual role as both a commercial venture and a political tool. Meanwhile, the project's payment structure—split between Chinese renminbi (RMB) and Russian rubles (RUB)—signals a broader de-dollarization trend in energy tradePower of Siberia 2 and its impact on the global gas market^[5].

For U.S. LNG exporters, PoS-2 poses a direct threat. Increased Russian pipeline gas in China could reduce demand for American LNG, which has struggled to compete with cheaper Russian supplies in recent yearsPower of Siberia 2: Redefining Energy Geopolitics^[4]. A 2025 analysis by Energy Policy notes that U.S. LNG projects in Asia face declining returns as China prioritizes long-term pipeline contracts over spot-market LNG purchasesPower of Siberia 2: Russia's Pivot, China's Leverage, and Global Gas Implications^[6]. This shift could accelerate the deindustrialization of U.S. energy sectors reliant on Asian exports, while reinforcing China's leverage in global energy negotiations.

Strategic Responses and Regional Implications

The Power of Siberia 2 project also triggers strategic responses from other nations. Mongolia, the pipeline's transit country, faces both economic opportunities and environmental challenges. While transit fees could boost its economy, the project risks exacerbating domestic inequalities and ecological degradationPower of Siberia 2 and its impact on the global gas market^[5]. For Europe, the pipeline's completion underscores the urgency of accelerating renewable energy transitions and diversifying gas supplies to mitigate long-term dependency on Russian energy.

Globally, the project accelerates the fragmentation of energy markets into distinct blocs. Russia and China's deepening ties—highlighted at the Shanghai Cooperation Organization (SCO) summit—contrast with U.S.-led efforts to promote LNG as a “bridge fuel” for global decarbonizationHow the Trade War is Reshaping the Global Economy^[3]. This realignment challenges the U.S. dollar's dominance in energy trade and could spur further regional currency settlements, reshaping financial systems alongside energy networks.

Conclusion: A New Era in Energy Geopolitics

Gazprom's resumption of full capacity on the Power of Siberia Pipeline, coupled with the PoS-2 project, represents a seismic shift in global energy dynamics. For investors, the implications are clear: Russia's pivot to Asia strengthens its energy resilience while creating both opportunities and risks for U.S. LNG exporters, European energy security, and regional economies like Mongolia. As the pipeline network expands, the interplay between geopolitical strategy, market forces, and environmental concerns will define the next decade of energy investment.