Russian President Vladimir Putin said on Wednesday that the planned new Power of Siberia 2 gas pipeline would give competitive benefits to China because the world’s biggest energy consumer would get gas at a price based on a market formula.

Russia and China gave their blessing to the vast pipeline by signing a binding memorandum but have yet to agree on pricing, Gazprom said on Tuesday, underscoring President Xi Jinping’s disregard for Western demands that he row back from a deepening partnership with Moscow.

Putin said the agreements on gas would ensure Russia will supply a total of over 100 billion cubic metres (bcm) of gas per year to China when the new pipeline was built.

He said the price of the gas supplied to China would be based on a “market-based formula”, but gave no further details.

Putin said that global demand for energy was on the rise, including in China, and that the agreements made with Russia, the world’s biggest producer of natural resources, would ensure stable and reliable supplies.

Source: Reuters