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

The energy giant will launch gas supplies via the Far Eastern route in 2027, CEO Aleksey Miller has announced

Supplies of Russian gas to China via the Far Eastern route will start in 2027, Gazprom CEO Aleksey Miller said on Friday, according to the company’s Telegram channel.

The Far Eastern route will deliver supplies of Russian natural gas from the shelf off Sakhalin Island to China. Moscow and Beijing sealed an agreement for additional pipeline gas deliveries via the new route in February 2023.

According to Miller, the Far Eastern route will have an annual capacity of 10 billion cubic meters (bcm) once fully operational. The project involves the construction of a cross-border section across the Ussuri River between the already operational Russian pipeline and the Chinese city of Hulin.

“With the Power of Siberia and the Far Eastern route reaching full capacity, Russia will become the largest gas supplier to China,” Gazprom’s chief executive stated.

Russia currently supplies gas to China via the Power of Siberia pipeline, a section of the so-called Eastern Route, under a bilateral 30-year agreement. Deliveries started in 2019, and the pipeline is expected to reach its full operational capacity of 38 bcm of natural gas annually next year, according to Miller.

Gazprom has been systematically boosting gas exports to China via the pipeline, he elaborated.

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Moscow and Beijing are also nearing a deal on the construction of a mega gas pipeline known as the Power of Siberia 2. It will transport up to 50 bcm of gas annually from the Yamal Region in northern Russia to China via Mongolia.

Once all the pipelines are fully operational, the volume of Russian gas supplies to China could reach nearly 100 bcm annually.

“Russian gas is in demand in China,” Miller said on Friday, adding that in 2023 supplies exceeded contractual obligations by 700 million cubic meters. “At the beginning of this year, we continued to break records for daily exports to Chinese consumers.” 

Natural gas consumption in China is projected to double by the middle of this century, Miller concluded, citing experts.

June 28, 2024 at 10:58PM

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