Antonina Levashenko, Head of International Best Practices Analysis Department at the Gaidar Institute, noted in a comment for Nezavisimaya Gazeta that despite statements about the conclusion of a binding memorandum on the Power of Siberia 2 project, the key terms of the agreement remain unclear.
According to the expert, the start date for construction of the gas pipeline, the distribution of financing terms and conditions between the parties, the formula for calculating gas prices, and the volume of supplies are still unknown.
Antonina Levashenko also drew attention to unresolved issues that had previously hindered the deal: "It is unclear whether an agreement has been reached on the gas price, as China had previously offered to purchase Russian gas at Russian domestic prices. It is also unknown whether the terms of the take-or-pay gas contract have been determined, i.e., when the parties determine the minimum contractual volume that must be paid for, even if the buyer does not purchase everything that is delivered. Thus, Russia planned to include terms ensuring payment for 80% of supply," she noted.
The expert also assessed the importance of Mongolia's role as a transit country: "The project will bring additional benefits, as gas will also be delivered to Mongolian consumers. The parties have agreed that the route through Mongolia is optimal – convenient for receiving gas from a larger number of fields and also has advantages – it reduces the length of the pipeline to consumption centers in China by 1,000 km and also has flat terrain that is convenient for construction." According to Antonina Levashenko, “this determines the importance of Mongolia's participation in the project, given that for Russia this means additional costs for transit fees.”