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Gazprom is working on the infrastructure design for a new natural gas pipeline to China from Russia’s Far East, the Russian gas giant said on Thursday.
Russia and China agreed to boost Russian gas deliveries years ago, and Gazprom and Chinese state energy giants have been working for years to raise gas supply via pipelines.
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.
Earlier this week, Gazprom’s CEO Alexey Miller said that Russia could soon supply China with volumes of gas comparable with the volumes Moscow sent to Western Europe before the invasion of Ukraine.
Before the war in Ukraine, Russia supplied around 35% of all the gas to Europe.
Analysts doubt that Russia could boost volumes to China to such levels for at least another seven years, according to Russian daily Vedomosti.
This year, Gazprom’s exports to Europe have slumped and dragged the gas giant’s profits down. 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 Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.