Russia’s Gazprom discloses details of major new deal with China

In 2027, Gazprom's CEO Aleksey Miller announced that the energy giant will begin supplying gas through the Far Eastern route.

On Friday, Gazprom CEO Aleksey Miller revealed that Russian gas supplies to China via the Far Eastern route would commence in 2027, as reported on the company’s Telegram channel.

The Far Eastern route is designed to transport Russian natural gas from the shelf off Sakhalin Island to China, as part of an agreement forged between Moscow and Beijing in February 2023 for additional pipeline gas deliveries via this new route.

Once fully operational, the Far Eastern route will have an annual capacity of 10 billion cubic meters (bcm). The project encompasses constructing a cross-border section across the Ussuri River, linking the existing Russian pipeline to the Chinese city of Hulin.

Gazprom’s chief executive declared, “With the Power of Siberia and the Far Eastern route reaching full capacity, Russia will become the largest gas supplier to China.” Currently, Russia supplies gas to China through the Power of Siberia pipeline, a section of the Eastern Route, under a 30-year bilateral agreement. Gas deliveries commenced in 2019, and the pipeline is anticipated to reach its full operational capacity of 38 bcm of natural gas annually next year.

Miller also explained that Gazprom has been consistently increasing gas exports to China through the pipeline.

Additionally, Moscow and Beijing are close to finalizing an agreement for the construction of the Power of Siberia 2, a substantial gas pipeline that will transport up to 50 bcm of gas annually from the Yamal Region in northern Russia to China via Mongolia.

When all the pipelines are fully operational, Russian gas supplies to China could potentially reach nearly 100 bcm annually. Miller expressed, “Russian gas is in high demand in China,” emphasizing that in 2023, supplies surpassed contractual obligations by 700 million cubic meters, and daily exports to Chinese consumers have been breaking records this year.

Miller cited experts in projecting that natural gas consumption in China is expected to double by the middle of this century.