Russia’s Gas Flows to China Will Reach Capacity Ahead of Plan

(Bloomberg) -- Russia’s Gazprom PJSC agreed with China National Petroleum Corp. to ramp up gas flows on the Power of Siberia pipeline to maximum capacity by year’s end, ahead of schedule.

“In line with a request from Chinese partners, the parties agreed on additional supplies for December,” Gazprom said in a statement on Telegram. That “will ensure an early increase in daily gas supplies to China via the Power of Siberia pipeline to the maximum contract level,” previously targeted for early 2025.

Gazprom has been gradually raising exports on the link, which has a design capacity of 38 billion cubic meters a year. Russia has become increasingly reliant on China as a buyer of its energy since Moscow’s invasion of Ukraine opened up a rift with Western partners.

In the first eight months of this year, Gazprom increased supplies via Power of Siberia to about 20.8 billion cubic meters, according to Bloomberg calculations based on Chinese customs data and price estimates from Russia’s Economy Ministry. That compares with 22.7 billion cubic meters for the whole of 2023.

The company is also developing another conduit to take gas from Russia’s Far East to China. Construction of that link, with a design capacity of 10 billion cubic meters a year, is on schedule, the Russian producer said. It has previously given a start date of 2027.

A third route — the proposed Power of Siberia 2 — remains under discussion. That line could bring Russia’s annual gas flows to China to almost 100 billion cubic meters. Yet negotiations have stalled as the two sides are still to agree on a price for the gas.

©2024 Bloomberg L.P.