Russia Raises Gas Export to China via Eastern Route

 Russia Raises Gas Export to China via Eastern Route

Russia’s state-owned Gazprom PJSC and China National Petroleum Corp. (CNPC) have agreed to increase the volume of Russian gas exported to China via the Power of Siberia Pipeline next years.

“[I]t was noted at a meeting between representatives of the oil and gas majors that Russian gas supplies via the eastern route, i.e. the Power of Siberia gas pipeline, are carried out in a reliable manner,” Gazprom said in a press release, without providing volume data.

“The companies are preparing for the increase of these supplies which is planned for 2024.

“Apart from that, a significant increase in the volumes of the gas supplies has already been provided since mid-November this year in line with the previously signed Supplementary Agreement to the relevant Sales and Purchase Agreement.”

In October 2023, Gazprom announced a Supplementary Agreement with CNPC, another state-owned company, for the supply of Russian gas to China through Power of Siberia for the remainder of the year. Gazprom and CNPC signed a long-term agreement for gas supply to China via the pipeline in February 2022.

“As soon as the project reaches its full capacity, the amount of Russian pipeline gas supplies to China is going to grow by 10 billion cubic meters [353.15 billion cubic feet], totaling 48 billion cubic meters [1.7 trillion cubic feet] per year (including deliveries via the Power of Siberia gas trunkline),” Gazprom said in a press release at the time.

The companies signed a technical agreement in June 2022 that “outlines the key technical parameters of the gas pipeline’s trans-border section, including the submerged crossing under the boundary river Ussuri, as well as the physical and chemical properties of gas to be supplied,” according to a Gazprom press release at the time.

Power of Siberia, which connects Russia’s Far East region to China, went live in December 2022, as announced by Gazprom at the time.

Gazprom said announcing the planned increase for 2024, “Design development works are in progress for the gas pipeline of the Far Eastern route, including the trans-border section to cross the Ussuri River in the vicinity of the Dalnerechensk town (Russia) and the Hulin city (China).”

“The parties also discussed the prospective project for gas supplies from Russia to China across Mongolia,” Gazprom added.

In March 2023 Russian President Vladimir Putin said negotiations were closing in on the planned Power of Siberia II, which would cross Mongolia into China, as he forecasted an increase of at least 98 billion cubic meters (3.46 trillion cubic feet) in gas exports to China by 2030, according to a Kremlin transcript of talks between Putin and Chinese counterpart Xi Jinping during the latter’s visit to Russia.

Besides Power of Siberia, Gazprom this year opened another gas route to China.

In September it announced it had achieved its maiden delivery of liquefied natural gas using the Northern Sea Route in the Arctic Ocean, meant for China.

The Arctic shortcut between Europe and Asia allows for faster shipping compared to the traditional routes through Egypt’s Suez Canal and South Africa’s Cape of Good Hope.

Gazprom’s private competitor Novatek PJSC has already been using the Northern Sea Route to deliver gas to China. Novatek completed its first gas delivery to China via the route September 2010.

The cargo for state-owned China National Offshore Oil Corp. took 22 days from the Russian port city of Murmansk near the border with Finland to its destination, the port of Ningbo, a city on the eastern coast of mainland China. The voyage was about half the time it would have taken through the Suez Canal, Novatek said in a news release at the time.

Related post