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Gazprom has accounted for more than half of the rise in China’s natural gas imports so far this year, Alexey Miller, the chief executive officer of the Russian gas giant, said on Thursday.
Russia’s state gas giant has relied on more natural gas exports to China as sales to Europe have plummeted since the Russian invasion of Ukraine.
Natural gas demand in Europe has dropped this year for a second consecutive year, the executive says in a Telegram post by Gazprom cited by Reuters.
“At the same time, we see that the Chinese gas market is growing. China's gas imports have increased over the eight months of this year. And more than half of the increase in these supplies imported to the Chinese market was provided by Gazprom,” Miller was quoted as saying.
Gazprom supplies natural gas to China via the Power of Siberia pipeline. Deliveries in 2022 stood at 15 billion cubic meters, while total flows for the whole of this year are expected to rise to 22 billion cubic meters.
Early this year, reports had it that Russia had increased the export capacity of its pipeline to China to over 60 million cubic meters daily.
China has become a more or less first-priority destination for the Russian state gas major after the breakup with Europe.
The Power of Siberia was one of the biggest projects recently completed by Gazprom and the first conduit for Russian gas to China. Now, there’s talk about Power of Siberia 2, which Russian Deputy Prime Minister Alexander Novak said last year would serve as a sort of replacement for the defunct Nord Stream 2 in Gazprom’s export growth strategy.
This year, Gazprom’s exports to Europe have slumped and dragged the gas giant’s profits down this year compared to 2022. Gazprom has reported a massive drop in its first-half net profit as deliveries to Europe plunged compared to 2022, when Russia was still supplying pipeline gas to its European customers for most of the first half of last year.
By Charles Kennedy for Oilprice.com
Charles is a writer for Oilprice.com