Gazprom has reduced its planned investments for next year by 7% compared to 2024 because Russian natural gas is currently heading towards China instead of Europe.
Gazprom's investment is aimed at developing gas mines and production facilities in eastern Russia and the Yamal Peninsula, as Gazprom is shifting to supplying more gas to China than to Europe, which was the company's main export market until Russia launched a military campaign in Ukraine and Gazprom cut off supplies to many European countries.
Russian gas sales to China are rising as Gazprom increases capacity via the large Power of Siberia pipeline. Russia and China are also developing the Power of Siberia 2 project - a similarly large-scale gas pipeline.
However, it is unclear when Power of Siberia 2 will increase supplies to China enough to compensate for 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 Ukraine.
Accordingly, investments next year will focus on expanding the capacity of the Power of Siberia pipeline to China and other projects.
For 2025, Gazprom sets an investment budget of 14.1 billion USD. 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 a deficit," the company said in a statement reported by Russian news agency TASS.
"Decisions on borrowing under the program will be made based on market conditions, liquidity and the company's financial needs."
Over the past year, Gazprom has recorded a loss due to falling gas sales in Europe. The Russian gas giant recorded its first annual loss in more than two decades in 2023.
Sales in Europe are likely to fall further in 2025, as Gazprom itself believes 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 Turkey, excluding former Soviet states, are expected to fall by a fifth next year to just under 39 billion cubic meters as the Ukraine transit deal ends. This figure will fall compared to more than 49 billion cubic meters of Russian exports to Europe and Turkey expected in 2024.
With most of Europe's markets closed, Gazprom is heading towards China - a huge market where gas demand is expected to continue to increase in the near future.
Last month, a senior Gazprom executive said the company's gas supplies to China this year would exceed the contract volume by 1 billion cubic meters.
