Gazprom Readies Asian Pipe Push

Russia’s Gazprom will soon start building large new gas pipelines connecting fields to Asia as it keeps up plans to diversify sales away from Europe, the state-run gas giant’s CEO Alexei Miller said on Sunday.

“We will in the nearest future start to implement new large projects to build trunk gas pipelines,” Miller told the Rossiya 1 television channel.

He did not specify whether Gazprom is preparing to start construction of the Power of Siberia 2 pipeline to China and its Soyuz Vostok transit section in Mongolia. The Russian gas giant is still in talks over a 50 billion cubic meter per year supply contract with state China National Petroleum Corp. that would underpin construction.

Power of Siberia 2 is key to Gazprom’s diversification plans after its exports to Europe fell dramatically over the past year due to the war in Ukraine.

The pipeline should double Gazprom’s export capacity in China from the 48 Bcm/yr provided by the existing supply contracts. Last year Gazprom shipped 15.5 billion cubic meters through Power of Siberia, which could rump up to 38 Bcm/yr by 2025. It has yet to ship volumes under the 10 Bcm/yr “Far Eastern Route” deal.

Apart from Power of Siberia 2, Gazprom plans to build links from its existing gas pipes designed to export to Europe and planned new pipes traveling east that will allow it to redirect gas flows to markets in Asia.

“We think about new markets. We have a lot of resources, enough for many years ahead,” Miller said.

“We all clearly understand that the Asian market is now the most dynamic market in the world. Consumption volumes are growing, and we see very big prospects for Russian gas on this market,” he said.

Gazprom is also looking for opportunities to export pipeline gas to Central Asia and possibly to southern Asia.

Gazprom’s daily exports to Europe have fallen by almost 80% this year. Currently around 65 million cubic meters per day is running via Ukraine and the Europe-bound onshore continuation of the Turk Stream pipeline to Turkey.

In some cases, Russia itself has curbed flows, but the EU has broadly adopted a goal last year to cut by two-thirds the roughly 150 Bcm of Russian gas it used annually prior to the war in Ukraine.

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