In the next 3 years, the price of Russian gas sold to China is expected to be at least 27% lower than the price of gas sold to Turkey and some remaining customers in Europe, according to the prospect submitted by the Russian Ministry of Economy along with the draft budget to the National Duma on September 29. In 2025 alone, the price difference will be larger, at 38%.
Forecasts show that the shift to China has not compensated for the losses that Russia has recorded in most European gas markets since the conflict in Ukraine broke out in 2022. The flow of gas through the Western pipeline used to be Gazprom's largest source of revenue.
Now, after the new Power of Siberia 2 gas pipeline deal was signed in early September, the Russian gas giant will be more attached to China.
Gazprom CEO Alexei Miller has said that gas prices for China are " objectively lower" than those for Europe because gas mines supplying the Asian pipeline are closer to customers.
This year, gas exports to China are estimated at 248.70 USD/1,000m3, compared to 401.90 USD/1,000m3 for Western markets, excluding countries in the former Soviet Union.
The volume of gas exported to China via the Power of Siberia pipeline in 2025 is expected to increase by more than 1/5 compared to last year, when the pipeline reached a designed capacity of 38 billion m3/year. In early September, Gazprom and the National Oil and Gas Group of China (CNPC) signed a trade agreement to increase supply through the pipeline by 6 billion cubic meters per year.
Both companies also agreed to increase annual supply via the Vientiane pipeline by 2 billion m3 to 12 billion m3 from 2027.
Under a legally binding agreement to build the Power of Siberia 2, a gas pipeline connecting Russia and China via Mongolia, the Russian gas giant will transport up to 50 billion cubic meters per year to China over 30 years.
Gazprom exported more than 21 billion cubic metres of gas to Turkey last year and nearly 16 billion cubic metres to several friendly countries in Europe via the TurkStream pipeline, the last gas pipeline still operating in the region.
In other developments related to Russian gas, Totalenergies CEO Patrick Pouyanne said that Russian liquefied natural gas (LNG) shipments could be diverted to other regions of the world if the European Union (EU) bans imports without sanctioning Russia's Yamal LNG.
Totalenergies of France is a shareholder of the Yamal LNG plant led by Novatek in northern Russia and has a long-term contract to buy fuel from this plant.
I can take LNG and take it to another place instead of Europe, it could be Turkey, India. Turkey is not far from Europe, but not in the EU," Patrick Pouyanne said on September 29 in New York, USA.
The statement came after the EU proposed a ban on Russian LNG imports a year earlier than planned, starting in 2027.
Mr. Pouyanne pointed out that in the event of a Yamal sanctions, Totalenergies will have to stop supplying Russian LNG and apply the force majeure clause.
