Laying the Power of Siberia 2 gas pipeline through Mongolia will save Gazprom millions of dollars, interviewed experts believe. Transit through the Irkutsk region and Buryatia will allow the monopolist to avoid difficulties with the high mountain regions of Altai, and will also accelerate the social gasification of Eastern Siberia and the Far East. However, not everything is so simple - the new route may pose a threat to the ecology of the Tunka Valley.

New route

Gazprom has preliminarily determined the route of the Power of Siberia-2 main pipeline. The new route will pass through the Irkutsk region and three districts of Buryatia. The Ministry of Development of Transport, Energy and Roads of the Republic stated that during the implementation of the project, the possibility of social gasification of local households with network and liquefied natural gas (LNG) will be considered.

Initially, the route of the "Power of Siberia - 2" assumed a direct route from Altai to the border with China. This option made it possible to bypass third countries, such as Mongolia.

The new scheme will originate in the Irkutsk region, then the gas will flow from north to south through the cities of Zima, Sayansk and Cheremkhovo. The next key point will be the Tunka Valley, from where the fuel will be redirected to the border with Mongolia. After that, the pipeline will turn towards the Kyakhtinsky and Zakamensky regions of Buryatia and cross the border with the Asian country near the city of Kyakhta. On the territory of Mongolia, the fuel will go through the continuation of the "Power of Siberia - 2" - the Soyuz Vostok pipeline, after which the gas will reach the Chinese border.

After the implementation of the project, Russia will be able to supply fuel from Western Siberia both to the West and to the East, for the first time in history having received the right to choose foreign gas buyers. The new route will gradually shift the transit focus towards China, whose gas market should grow to a record 550 billion cubic meters of consumption per year in the next 10-15 years. By that time, the construction of the Power of Siberia - 2 will also be completed (the plan implies the completion of work by 2030 -).

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Gasification of Eastern Siberia and the Far East

Gazprom's new project is beneficial not only by a significant increase in fuel supplies to China, but also by accelerating the pace of gasification of remote regions of Eastern Siberia and the Far East. First of all, this applies to residents of the capital of Buryatia - Ulan-Ude, as well as hard-to-reach villages in the Irkutsk region, said Sergey Kondratyev, senior expert at the Institute of Energy and Finance.

According to him, to ensure the energy security of these regions, gasification using liquefied natural gas (LNG) is ideal. Another option would be the transfer of large coal-fired heating plants in Buryatia - CHPP-1 and CHPP-2 - to gas fuel.

“The way out will be the construction of mini LNG plants with a production capacity of 10-20 million tons. This will cost Gazprom several tens of millions of dollars. But it will still be much cheaper than building a large LNG plant in Vladivostok worth $5-6 billion.

However, the social gasification of the Far Eastern regions will still rest on economic efficiency, Kondratyev added.

“For Gazprom, 10-15 thousand rubles per thousand cubic meters of LNG will become a favorable tariff. For comparison, the cost of a ton of coal in Russia is on average 3-4 thousand rubles. A similar indicator for natural gas, taking into account its calorific value, reaches 5-7 thousand rubles,” he explained.

The situation is complicated by the fact that the issue of domestic pricing has not yet been resolved in Russia, so Gazprom is now in no hurry to invest in the construction of LNG plants and terminals in the Far East.

“It will be incredibly difficult for a monopolist to extract even a minimal profit at domestic wholesale prices of 5-6 thousand rubles per thousand cubic meters. At this price, it is good to sell fuel in the European part of Russia using the existing infrastructure. Starting everything from scratch in the Far East at such a cost of fuel would be suicidal. Ideally, prices should be at least around 10,000 rubles,” the expert concluded.

Back to the news seems to have managed to negotiate relatively low gas prices for domestic use. In addition, in the future, Gazprom will inevitably have to pay additional millions of dollars for transit through a third country, Kondratyev stressed.

“The monopolist runs the risk of getting roughly the same contractual price tag for Mongolia as in the case of China. Here again there will be an oil binding, which means the average cost of fuel in the region of $250-300 per thousand cubic meters. True, this is still better than the hydro-alternative, which Ulaanbaatar insisted on in negotiations with Russia, ”the analyst noted.The principal condition of the Mongolian authorities was the construction of large hydroelectric power plants at the sources of the rivers that flow into Baikal. If Ulaanbaatar had succeeded in realizing his plan, it would have led to an ecological disaster.

“While there was a collection of liquid in the hydroelectric reservoirs, the regulation of the levels of river sources would serve as a prerequisite for a sharp decrease in the volume of fresh water in the Russian lake. This would also lead to a gradual shallowing of the Angara, which would have already affected many Siberian cities,” Kondratiev explained.

At the same time, Deputy Director General of the National Energy Institute Alexander Frolov, in a conversation with, urged not to exaggerate Gazprom's losses from transit through Mongolia.

“The inclusion of Ulaanbaatar in the new route allowed Gazprom to save millions of dollars. The previous version assumed a fairly long mountainous section of the route through the Altai. The laying of pipes through Mongolia assumes mostly flat terrain, which is much easier to build on,” the expert noted.

He added that Mongolia's annual gas requirements are relatively small. Even if contract fuel prices were high, Gazprom would still not be able to extract significant revenue from trade with this country.

“In 2025-2030, the country's gas needs are estimated by experts in the region of 3 billion cubic meters. For comparison, China consumed about 370 billion cubic meters in 2021 alone. In this context, it makes no sense to consider separately the volumes of supplies to Mongolia, these are scanty volumes,” Frolov concluded.

H4 What is the case with the eco-friendly project / h4 on the new route Gazprom risks to face not only with economic difficulties, but also with environmental challenges. The fact is that the route involves the laying of equipment through the environmental protection zone of the Tunkinsky National Park, Kondratyev emphasized.

According to him, the monopolist, with a high degree of probability, will have to cut down forest areas for laying pipes. In addition, methane leaks, which periodically appear even on the most modern gas pipelines, can also pose an environmental hazard to the region.

“I would not rule out a possible repetition of the precedent with the Eastern Siberia-Pacific Ocean oil pipeline. Then Putin had to intervene in order to move the route away from Lake Baikal.

The main danger to the Tunka Valley is a sharp increase in greenhouse gas emissions. A ton of methane is equivalent to 20-25 tons of CO2. Some ecologists bring this coefficient up to a 100-fold difference,” the expert said.

At the same time, Frolov has a more optimistic view of the environmental threat of the Power of Siberia-2 pipeline. In his opinion, Gazprom possesses sufficient technologies to protect the lives of Red Book animals as much as possible. As an illustrative example, he cited the already implemented Dzhubga-Lazarevskoye-Sochi pipeline, which was built for the 2014 Winter Olympics.

“It was impossible to lay a pipe in the coastal zone. As a result, Gazprom carried out directional drilling, laying equipment under the nature protection zone. In this scenario, it is not at all necessary to cut down forests in the Tunka Valley. And the same compressor stations with high power can be installed not after 100-150 km, but after 500 km,” he stressed.

At the same time, Frolov pointed out the minimal risks of methane leakage along the Power of Siberia-2 route: such modern facilities will be regularly checked using internal spectroscopy, and robots will strengthen the strong seams of the pipeline.

“The same Nord Stream has been in operation for more than 10 years. If Euro-environmentalists had revealed even the smallest leak, they would have raised such a fuss ... Instead, even before the construction of SP-1, they found a ship with a cargo of chemical warfare agents on the bottom of the Baltic Sea, which sank back in the First World War. It’s scary to imagine how many more such boats there are… Against this background, talking about the environmental harm of the pipeline is simply ridiculous,” Frolov summed up.

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