Power of Baikal Pipeline Sparks Concerns Over Geopolitical Risks in Sino-Mongolian Relations

At the Eastern Economic Forum on September 2, Russian Energy Minister Sergei Tsivilev announced that President Vladimir Putin had renamed the planned 'Power of Siberia 2' natural gas pipeline to 'Power of Baikal.' This massive infrastructure project will stretch from the Yamal Peninsula and western Siberia, passing through Mongolia into China. The pipeline is designed to transport a staggering 50 billion cubic meters (bcm) of natural gas annually, surpassing the approximately 38 bcm capacity of the existing eastern route.

The pipeline's planned route has raised concerns about potential geopolitical risks. If Sino-Mongolian relations were to deteriorate or if Russia leveraged its influence over Mongolia's energy supply, could Ulaanbaatar restrict gas transit and create a strategic chokehold on China? However, experts suggest that such a move would come at an exorbitant cost for Mongolia.

From an engineering perspective, the Mongolian route is far more practical than the original western route proposal. The Altai Mountains and Xinjiang region feature treacherous terrain, complex geological structures, and protected environmental zones, making pipeline construction exceptionally difficult. In contrast, Mongolia's landscape primarily consists of open steppes and deserts with sparse population density, providing a highly favorable environment for constructing large-diameter pipelines.

Mongolia is uniquely bound by deep constraints with both Russia and China. With 97% of its petroleum product imports coming from Russia, Mongolia's domestic fuel supply is highly vulnerable to Moscow's sway. Meanwhile, the country relies heavily on Chinese procurement volumes and border port efficiency for its exports, particularly coal and copper concentrate.