Russian gas exports to China to grow by a quarter, but won't offset losses from Europe - Reuters
Kyiv • UNN
Russian natural gas exports to China via pipeline are expected to grow by a quarter this year, reaching 38.6-38.7 billion cubic meters. However, this will not compensate for the drop in revenues from the loss of the European gas market.
Russia's natural gas exports to China via pipeline are expected to increase by a quarter this year, as Moscow ramps up sales to Asia and strengthens ties with the world's largest energy consumer, Reuters reported on Monday, citing a source familiar with the data, writes UNN.
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However, as Reuters calculations showed, this will not compensate for the drop in revenues from the loss of the European gas market.
Since the start of Russia's full-scale war against Ukraine in 2022, Russia has redirected most of its oil to India and China, as Moscow and Europe – once its main market for commodity exports and source of revenue – severed ties.
Redirecting gas flows to the east has proven more difficult, and painstaking negotiations to supply more Russian gas to China have yielded limited results, the publication writes.
The source said that Russian energy giant Gazprom expects gas exports to China via the Power of Siberia pipeline to reach approximately 38.6-38.7 billion cubic meters this year, up from 31 billion cubic meters in 2024, and exceeding the pipeline's planned annual capacity of 38 billion cubic meters.
Gazprom did not immediately respond to a request for comment. Its CEO, Alexey Miller, stated in October that deliveries via Power of Siberia-1 would exceed 38 billion cubic meters this year.
During the visit of Kremlin head Vladimir Putin to China in September, the countries agreed to increase annual volumes on the route by another 6 billion cubic meters, to 44 billion cubic meters per year.
Russia and China have also agreed to build the Power of Siberia 2 pipeline, which could one day supply an additional 50 billion cubic meters of Russian gas per year via Mongolia from the Arctic gas fields of Yamal.
However, the main obstacle to the project's implementation remains the price of Russian gas, the publication indicates.
China has also agreed to increase the volume of gas it buys via pipeline from Sakhalin Island in Russia's Far East to 12 billion cubic meters per year from the 10 billion cubic meters agreed earlier. The route is expected to become operational in 2027.
The Russian Ministry of Economy estimates that gas export revenues to China will be 30-40% lower than the cost of exports to Europe in 2025-2028.
The only operational route for Russian gas supplies to Europe is the TurkStream pipeline under the Black Sea. Supplies via Ukraine, which in recent years amounted to about 12-15 billion cubic meters, were stopped at the beginning of the year, as Moscow and Kyiv failed to extend the transit agreement.
According to the Russian Ministry of Finance, gas exports brought about 420 billion rubles (5.28 billion US dollars) to the Russian state budget in January-November.
According to Reuters calculations, gas exports will amount to about 470 billion rubles this year, which is 71% less than the record 1.63 trillion rubles in 2022, when gas prices at European hubs sharply increased, and less than 490 billion rubles in 2024.
Russian LNG exports to China hit record levels - Bloomberg22.12.25, 09:45 • 4710 views