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Gazprom’s natural gas flows via the Power of Siberia pipeline to China have reached full capacity of 38 billion cubic meters annually, the Russian gas giant said on Monday.
Gazprom started sending gas to China via the Power of Siberia pipeline at the end of 2019, and flows have now reached the maximum design capacity.
“We see demand for Russian gas on the growing Chinese market and the important role that Russian gas plays in the stable energy supply of China’s economy,” Gazprom chief executive Alexei Miller said in a statement carried by Russian news agency Interfax.
“Long-term contracts between Gazprom and CNPC [China National Petroleum Corporation] strengthen the good-neighborly relations between our countries. I am confident that mutually beneficial strategic cooperation in the gas sector will continue to develop dynamically for the benefit of Russia and China,” Miller was quoted as saying.
With most of the European market now closed for Gazprom, by its own choice, the Russian gas giant is now betting big on China and its surging natural gas demand to offset the loss of sales that were previously going to Europe.
Gazprom’s investment is now geared toward developing gas fields and processing facilities in eastern Russia and the Yamal peninsula, as the Russian firm is pivoting to supplying more gas to China than to Europe, which was its main export market until the Russian invasion of Ukraine and Gazprom cutting off supply to many European countries.
Russian gas sales in China have been rising as Gazprom was ramping up capacity via the Power of Siberia pipeline.
But a significant boost to supply that would more than double the current flows with a new pipeline, Power of Siberia 2, looks further away than it did last year.
Russia appears to be struggling to convince China to take on more pipeline gas amid disagreements over the price China would pay. Beijing is not committing yet to the massive new pipeline project to import Russian pipeline gas unless it’s favorable for the world’s second-largest economy.
