Mongolia Anticipates Power of Siberia-2 to Generate $1 Billion Annually
The Power of Siberia-2 gas pipeline has the potential to revolutionize energy security in Northeast Asia, but it will require cooperation between Moscow and Beijing. Once completed, the pipeline is expected to have an annual capacity of approximately 50 billion cubic meters of gas, significantly increasing natural gas supply to China and the rest of Asia.
From an economic perspective, Mongolia stands to benefit greatly from the Power of Siberia-2. The country anticipates earning up to USD 1 billion in transit fees every year, which will greatly boost its revenue. Additionally, the pipeline’s construction is expected to create employment opportunities, diversify Mongolia’s economy, and hasten its transition away from coal. These developments are crucial for sustaining Mongolia’s economic growth.
Currently, Mongolia is a developing nation with an average per capita income of slightly over USD 4500. The country also suffers from a high underemployment rate of over 12 percent and heavily relies on resource extraction. The windfall from the gas pipeline will have significant implications for Mongolia’s development, providing a much-needed economic boost.
In terms of energy, the Power of Siberia-2 pipeline will enable Mongolia to import natural gas, allowing for a quicker transition away from coal. Currently, coal accounts for 85 percent of Mongolia’s energy supply, with old coal-fired power plants servicing its major cities. Utilizing natural gas will not only reduce Mongolia’s heavy dependence on coal but also contribute to cleaner and more sustainable energy practices.
The implementation of the Power of Siberia-2 gas pipeline is a significant step forward for both Mongolia’s economic growth and its energy transition. By increasing natural gas supply to China and Asia, the pipeline will foster regional energy security. Furthermore, it will enable Mongolia to diversify its economy, create employment, and accelerate its move away from coal. This project holds immense potential for Mongolia’s future development and sustainability.
