The Future of Russia’s Gas Exports

This article was last updated on January 25, 2024

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The Projection of Russia’s Pipeline Gas Exports

Russia is gearing up to amplify its outbound pipeline gas flow by approximately a fifth. A forecast recently confirmed by Russian Deputy Prime Minister Alexander Novak who stated an expected increase in pipeline gas exports of up to 108 billion cubic meters in 2024. When compared to the 2021 output of 91.4 billion cubic meters, the upcoming period signifies a major leap in production and distribution, particularly to China.

Impact of Geopolitical Factors on Russian Gas Exports

In an ever-evolving geopolitical landscape, the fallout of Russia’s military intervention in Ukraine in 2022 drastically altered the economic dynamics of gas supply. Consequently, Russia’s gas export to Europe witnessed a substantial decline, making China the prime recipient of its pipeline gas. Nonetheless, even with this strategic pivot, Russia anticipates a lower volume of gas exports than the 185 billion cubic meters it reported in 2021.

Russia-China Synergy in Gas Transport

Historically, the Russia-China gas export-import relationship has strengthened and expanded since 2019 – the year the Power of Siberia pipeline became operational. Accruing substantial momentum, gas exports to China swelled to 22.7 billion cubic meters in 2023. However, this is only the tip of the iceberg as by 2025 Russia aims to nearly double its gas export through the same route to an outstanding 38 billion cubic meters.

Gazprom’s Ambitious Rollout Plan

Gazprom, the colossal state-owned Russian gas giant also has significant plans to further push gas exports to China. The cornerstone of their strategy is a projected annual supply of 10 billion cubic meters of gas to China through a second pipeline called the Far East route. This ambitious model is projected to take effect starting 2027.

The Future of Russia-China Gas Trade

Complementary to the aforementioned, Russia and China are also in the process of deliberating over the prospect of a new gas conduit. Conceptualized as Power of Siberia II, this pivotal pipeline route via Mongolia would facilitate the transport of an additional 50 billion cubic meters of gas annually.

Conclusion

To surmise, Russia’s gas export evolution delineates a steadfast progression towards China. While geopolitical dynamics played a role in pivoting from traditional European markets, the expansion of the Power of Siberia project is set to cement China as its primary trading partner for the foreseeable future.