Russian energy giant Gazprom is likely to become the largest natural gas supplier to the Chinese market, as deliveries are constantly growing, the deputy director of the strategy department, Kirill Polous, stated on Tuesday.
“Taking into account the previously signed contract for the supply of gas under the Power of Siberia project, the total contracted volumes amount to 48 billion cubic meters [including deliveries from Russia’s Far East]. With a high degree of probability, after reaching the specified volume of exports, Russia may become the largest gas supplier to China,” he said during discussion at the St. Petersburg International Gas Forum.
“At the same time, it is also important that while developing cooperation in the gas industry, Russia and China do not increase mutual dependence to critical levels,” he noted.
Polous also noted the shift to national currencies in trade settlements between the two countries, saying that “during the Eastern Economic Forum, an agreement was reached to transfer payment for gas supplies via the Power of Siberia gas pipeline into rubles and yuan.”
“We are talking about stable pricing mechanisms and the absence of regulatory barriers for the implementation of gas projects,” he stressed.
Gazprom has been ramping up gas exports to China via the Power of Siberia mega pipeline.
The 3,000 kilometer (1,864 mile) cross-border pipeline started official deliveries of Russian natural gas to China in 2019. The so-called eastern route’s capacity is 61 billion cubic meters of gas per year, including 38 billion cubic meters for export.
The agreement on gas supplies via the pipeline was reached in 2014, with Gazprom and CNPC signing a 30-year contract. The $400 billion agreement is Gazprom’s biggest deal ever and the Power of Siberia is the first natural gas pipeline between Russia and China.
The Russian company is currently working on the Power of Siberia 2 project, which involves the construction of a gas pipeline to China through the territory of Mongolia. The pipeline will be capable of delivering as much as 50 billion cubic meters of gas once it’s operational.
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