Russia said Gazprom PJSC and China National Petroleum Corp. could finalise a commercial agreement by the end of the year for gas supplies through the proposed Power of Baikal pipeline. The project, earlier known as Power of Siberia 2, could reshape global energy flows by more than doubling Russia’s gas exports to China.

“We are waiting for our companies to hold commercial talks,” Interfax cited Russian Deputy Prime Minister Alexander Novak as telling reporters on Wednesday. “We hope that by year-end they will reach the necessary agreements,” he said while referring to deliveries through the future pipeline.

Russia and China have discussed the project for years. The two countries already have gas supply agreements through the operational Power of Siberia pipeline and the upcoming Far Eastern route.

The main hurdles in the new deal remain pricing and flexibility over gas volumes. Russian President Vladimir Putin and other officials have said the remaining issues could be settled quickly. China has stayed cautious about relying too heavily on one supplier, even though Russia is already among its biggest energy partners.

The talks have drawn attention from global energy traders. China remains one of the world’s largest gas buyers. The liquefied natural gas market has faced disruptions linked to the Middle East conflict. Many analysts expect LNG supply to improve next year as new capacity comes online, especially in the US. European and Asian importers still plan to diversify supplies amid ongoing geopolitical risks.

The Power of Baikal pipeline will pass through Mongolia. It is expected to carry up to 50 billion cubic metres of gas each year from western Siberian fields that once supplied many European customers. That volume equals more than 10% of China’s current gas demand.

Once the project reaches full capacity, Gazprom’s gas deliveries to China are expected to exceed 100 billion cubic metres annually. The figure compares with nearly 40 billion cubic metres in 2025.

Russia currently sends gas to China through the original Power of Siberia pipeline. The Far Eastern route is scheduled to begin operations in early 2027 and will add up to 12 billion cubic metres of gas each year.