In 2023, Russian energy giant Gazprom announced a significant increase in its natural gas supplies to China via the Power of Siberia pipeline, setting a new daily record. While Gazprom did not specify the amount of the new daily record, it revealed that total gas exports to China via the pipeline in 2023 reached 22.7 billion cubic meters (bcm), a substantial increase from the 15.4 bcm exported in 2022. This growth comes as Russia seeks to compensate for the loss of its gas sales in Europe due to the ongoing war in Ukraine and the resulting Western sanctions.
Further, Gazprom exceeded its contractual obligations to China by 700 million cubic meters, or 3.2%, in 2023, and restated its goal for the Power of Siberia pipeline to reach its full export capacity of 38 bcm by 2025. Additionally, Russia is in advanced talks about constructing a new Power of Siberia-2 pipeline, which aims to carry 50 bcm of natural gas annually from Russia’s northern Yamal region to China via Mongolia. This pipeline would be almost as large as the now idle Nord Stream 1 pipeline under the Baltic Sea, which was damaged by explosions in 2022.
The Power of Siberia-2 project, expected to begin construction in 2024 and be completed by 2029, has gained urgency as Moscow aims to double its gas exports to China. However, key issues, including pricing, are yet to be finalized.
Despite the progress in Chinese exports, Gazprom’s supplies to Europe fell drastically by 55.6% to 28.3 bcm in 2023, a stark contrast to the peak levels of 175-180 bcm during 2018-19. The decrease is attributed to the European sanctions against Russia following the Ukraine conflict. These developments signify a strategic pivot by Russia to reroute its energy flows from Europe to Asia, particularly China, as it adapts to the shifting geopolitical and economic landscape.