WORLD: China overtakes Europe to become the main market for Russian gas delivered through pipelines
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China is on track to become the largest market for Russian gas delivered through pipelines this year, surpassing Europe after the Russian invasion of Ukraine led to the limitation of Russian gas supplies delivered to the European continent, reports Bloomberg, quoted by Agerpres.
The Russian group Gazprom exported 23.7 billion cubic meters of natural gas to China in the first nine months of the year, almost 40% more than the volumes exported in the same period last year, according to Bloomberg calculations based on data provided by the Customs Administration. Chinese and the estimates of the Russian Ministry of Economy.
Comparatively, in the January-September period, Gazprom delivered 22.5 billion cubic meters of natural gas to customers in Europe, based on calculations regarding gas deliveries through Ukrainian pipelines and the TurkStream gas pipeline.
Gazprom has gradually increased gas deliveries to China via the Power of Siberia pipeline, inaugurated at the end of 2019 and which has a maximum capacity of 38 billion cubic meters per year. Last year, the Russian giant agreed with China National Petroleum Corp. additional deliveries in December, which would ensure a faster increase in deliveries to the maximum contracted level, which was previously scheduled to be achieved only in early 2025.
This agreement comes in a context where the gas demand of the Asian economy is increasing. The International Energy Agency (IEA) expects China’s total gas consumption to rise by 8% this year, “driven by the industrial sector but also supported by electricity generation, residential and commercial users, as well as by the transport sector”.
Although Gazprom plans to increase its annual deliveries to China by another 10 billion cubic meters, via the so-called Far East route, this is a small fraction of the volumes of gas the Russian company was sending to Europe before the Russian invasion of Ukraine in 2022.
Even though most countries in the European Union have found alternatives to Russian gas, Gazprom remains an important energy supplier for some member countries, including Hungary, Austria and Slovakia. Bloomberg calculations show that Russian gas exports through the pipeline to the European region increased by 16% in the first nine months of this year, compared to the same period last year.
Russian gas supplies to Europe could be further reduced after the agreement on the transit of Russian gas through Ukraine expires at the end of this year. Ukrainian President Volodymyr Zelensky said he would not allow Russia to profit from sending gas through Ukraine’s pipelines.
Currently, negotiations are underway to replace the agreement on the transit of Russian gas, one of the possible solutions being Azerbaijan, but a final result is not in sight and there are less than three months until the end of the year.
