Gazprom is cutting its planned investments for next year by 7% compared to 2024 levels as Russian natural gas is now headed to China instead of Europe.
Gazprom's investment is aimed at developing gas fields and production facilities in eastern Russia and the Yamal Peninsula, as Gazprom shifts more gas supplies to China than to Europe, which was the company's main export market until Russia's military campaign in Ukraine and Gazprom cut off supplies to many European countries.
Russian gas sales to China are rising as Gazprom increases capacity through its massive Power of Siberia pipeline. Russia and China are also developing the Power of Siberia 2 project, a similarly large-scale gas pipeline.
However, it remains unclear when Power of Siberia 2 will increase supplies to China enough to offset Gazprom's declining gas sales in Europe.
The Russian giant is prioritizing development projects to boost supplies to China while preparing for the end of gas supplies to Europe via the Ukrainian route.
Accordingly, investments next year will focus on expanding the capacity of the Power of Siberia pipeline to China and other projects.
For 2025, Gazprom has budgeted investments of $14.1 billion. This figure will be 7% lower than the investment for 2024 of $15.2 billion.
"The approved financial plan will ensure that Gazprom's obligations are fully covered without running a deficit," the company said in a statement reported by Russian news agency TASS.
"Decisions on borrowing under the program will be made on the basis of market conditions, liquidity and the company's financial needs."
Gazprom posted a loss last year due to falling gas sales in Europe. The Russian gas giant posted its first annual loss in more than two decades in 2023.
Sales in Europe are likely to fall further in 2025, as Gazprom itself says it will not transport gas to Europe via Ukraine after December 31, 2024, when the current transit agreement expires, Reuters reported.
Russian gas exports to Europe and Türkiye, excluding former Soviet states, are expected to fall by a fifth next year to just under 39 billion cubic metres as the Ukraine transit deal ends. That would be down from more than 49 billion cubic metres of Russian exports to Europe and Türkiye expected in 2024.
With most European markets closed, Gazprom is turning to China – a huge market where gas demand is expected to continue to grow in the near future.
Last month, a senior Gazprom executive said the company's gas supplies to China this year would exceed the contracted volume by 1 billion cubic meters.
