Russian Gazprom CEO Alexey Miller announced in Beijing on Tuesday that Russia and China have signed a legally binding memorandum of understanding to build a new gas pipeline through Mongolia to China, according to Russian news agencies.

Miller indicated that the gas price supplied via the “Power of Siberia 2” pipeline will be lower than the price supplied to Europe due to reduced transportation costs.

Gazprom also signed documents with the China National Petroleum Corporation to increase gas supplies through the existing “Power of Siberia” pipeline from 38 billion to 44 billion cubic meters annually, according to reports.

Russian reports showed that the “Power of Siberia 2” pipeline, which is 6,700 kilometers long, including 2,700 kilometers within Russian territory, is planned to have a capacity of 50 billion cubic meters per year, with the contract extending for 30 years.

Miller described the pipeline as “the largest, widest, and most comprehensive gas project in the world in terms of capital intensity,” without disclosing any cost details.

Estimates indicate that the project cost will reach tens of billions of dollars.

This announcement follows a meeting between Russian President Vladimir Putin, Chinese President Xi Jinping, and Mongolian President Ukhnaagiin Khurelsukh in Beijing.