In a move that has sent ripples through global energy markets, Chinese President Xi Jinping has declined a proposed natural gas pipeline from Russia, a decision that British energy officials have characterised as a vindication of the UK's long-term strategy to diversify energy supplies and reduce dependence on authoritarian regimes.
The rejected proposal, known as the Power of Siberia 2 pipeline, would have transported up to 50 billion cubic metres of natural gas annually from Russia's Yamal Peninsula to China. The deal, championed by Russian President Vladimir Putin as a cornerstone of Russia's pivot to Asia, was expected to secure Moscow's energy revenues for decades amid Western sanctions.
However, according to sources close to the negotiations, Beijing's leadership grew increasingly wary of the geopolitical implications. “China does not wish to be tethered to a single supplier, especially one facing international isolation,” said Dr Li Wei, a geopolitical analyst at the China Institute of International Studies. “The decision reflects a strategic calculus: long-term energy security requires diversity, not dependency.”
The rejection comes at a critical juncture. Russia's energy sector has been battered by European sanctions following the invasion of Ukraine. The EU has slashed Russian gas imports from 40% of total supply in 2021 to under 10% in 2024, pushing Moscow to seek alternative buyers. China, the world's largest energy consumer, was seen as an obvious partner. Yet Beijing's refusal suggests a recalibration of priorities.
“This is a significant blow to Putin’s geopolitical ambitions,” explained Professor Helen Vance, a climate and energy correspondent at the University of Cambridge. “Russia’s influence in global energy markets has been tied to its ability to wield supply as a weapon. Without the Chinese pipeline, Moscow’s leverage diminishes considerably. The UK’s strategy of accelerating renewables and securing liquefied natural gas (LNG) contracts from diverse sources like Qatar and the United States has been proven prudent.”
The UK’s position contrasts sharply with Russia’s predicament. Since 2022, Britain has reduced its fossil fuel dependency by aggressively expanding wind and nuclear capacity. The country now sources less than 4% of its gas from Russia, down from 30% pre-invasion. Meanwhile, Russian gas exports to Europe have plunged by 80%, forcing the Kremlin to idle wells and scale back production.
Environmental advocates have expressed cautious optimism. “Every lost gas deal is a victory for the climate,” said Dr. Elena Petrov, an energy economist at the London School of Economics. “If China continues to expand its domestic renewables and imports from Central Asia, the demand for Russian hydrocarbons could dwindle further. The implication for global emissions is substantial.”
Yet analysts caution that the decision does not spell an immediate green transition. China remains heavily reliant on coal, accounting for over half of global consumption. The country’s solar and wind capacity, while vast, still lags behind its rising power demand. Natural gas is viewed as a bridge fuel, and Beijing may seek alternative suppliers such as Turkmenistan or Qatar.
The rejection also places Putin in a precarious domestic position. With European markets shuttered and Chinese buyers balking, Russia’s energy-driven economy faces a structural crisis. Oil and gas revenues, which comprise roughly 40% of the federal budget, are projected to fall by 15% this year. The Kremlin may now accelerate efforts to court other Asian buyers like India or Pakistan, but pipeline logistics and pricing disputes complicate these efforts.
For the UK, the episode reinforces the wisdom of its National Energy Security Strategy, unveiled in 2023, which prioritises domestic production and flexible LNG contracts. “We have effectively decoupled from Russian energy without the economic pain that was once feared,” said a spokesperson for the Department for Energy Security and Net Zero. “Our focus now is on embedding renewables as the backbone of our grid.”
As the world watches the fallout, one thing is clear: the rejection of the Siberian pipeline marks a inflection point. It signals China’s intent to chart an independent energy course while underscoring the brittleness of resource-backed diplomacy. For Putin, the humiliation is as much about a lost contract as it is about a diminishing role in global energy architecture.
“The message from Beijing is unmistakable,” concluded Professor Vance. “No single nation, no matter how resource-rich, can hold the global economy to ransom. The future belongs to diversification, resilience and, increasingly, to the technologies that promise liberation from the fossil fuel era.”
