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Russia Forecasts Lower Price for its Gas to China

NATGAS

Russia’s focus on boosting natural gas exports to China is proving less lucrative compared to its former westbound flows to Europe, Bloomberg said.

  • Gas prices to China are expected to be up to 28% lower than to Russia’s remaining European clients through to 2027.
  • The forecast indicates a drawback of the Kremlin’s efforts to develop energy ties with China as Europe looks to end its dependency on Russian gas.
  • Gazprom currently provides gas to China via the Power of Siberia pipeline, ramping up flows to a maximum of 38 bcm/y in 2025.
  • There are also ongoing discussions about a potential Power of Siberia 2, which if agreed, would raise Russian gas flows to China to 98 bcm/y.
  • Under Russia’s base case scenario, total gas exports will grow at least through to 2026.

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Russia’s focus on boosting natural gas exports to China is proving less lucrative compared to its former westbound flows to Europe, Bloomberg said.

  • Gas prices to China are expected to be up to 28% lower than to Russia’s remaining European clients through to 2027.
  • The forecast indicates a drawback of the Kremlin’s efforts to develop energy ties with China as Europe looks to end its dependency on Russian gas.
  • Gazprom currently provides gas to China via the Power of Siberia pipeline, ramping up flows to a maximum of 38 bcm/y in 2025.
  • There are also ongoing discussions about a potential Power of Siberia 2, which if agreed, would raise Russian gas flows to China to 98 bcm/y.
  • Under Russia’s base case scenario, total gas exports will grow at least through to 2026.

Keep reading...Show less