The planned pipeline that was supposed to transport gas from Russia to northeast China, known as “Power of Siberia-2,” has probably collapsed.

As the South China Morning Post (SCMP) reported on Monday, August 19, Mongolia, through whose territory the pipeline would pass, has not included the project in its national development plans until 2028.

According to SCMP, the pipeline could bring Mongolia transit revenues and 50 billion cubic meters of gas per year. But former Mongolian Security Council member Munkhnaar Bayarlkhaag said Moscow had failed to reach an agreement with Beijing.

“We are in a long pause in which Moscow no longer believes it can reach the deal it wants with Beijing and will probably put the project on hold until better times arrive,” he said.

Bayarlkhaag added that Beijing may have been unhappy about Russian state-owned energy company Gazprom potentially gaining sole control of the Mongolian section of the pipeline.

“This would have meant a sudden and long-term increase in Moscow’s influence in Mongolia to the detriment of Beijing,” he said. “Although it was never explicitly stated, it would have been ‘fair’ to involve the Chinese in the development of the Mongolian part from the beginning.”

On June 2, the Financial Times (FT) reported that China and Russia were unable to sign a contract for the pipeline because China demanded supply at Russia’s subsidized domestic prices and was only willing to purchase a small portion of the pipeline’s planned annual capacity.

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According to the Moscow Times, Gazprom’s debt has reached a record 6.65 trillion rubles ($73.2 billion), higher than Russia’s National Welfare Fund, which stands at 5 trillion rubles ($55 billion).