Russia is forced to continue its policy of massive discounts on gas for China, which has become effectively the only major client for Gazprom following the rupture of relations with Europe. According to Bloomberg data, double-digit discounts will persist at least until the end of the decade.
Pricing Parameters (Forecast through 2029):
- Current Year: Gas via the “Power of Siberia” costs China 39% less than clients in Europe and Turkey ($258 per thousand cubic meters vs. $420).
- 2027: The price for China will drop to $223.9, with the gap compared to European contracts reaching 33%.
- End of Decade: In 2028–2029, the discount will stabilize at 27–30% (approximately $230–235 per thousand cubic meters).
Export and Infrastructure Plans:
- Volumes: By 2029, exports to the PRC are planned to increase to 52.5 billion cubic meters (a one-third increase) through the “Power of Siberia” and the Far Eastern route.
- “Power of Siberia 2”: Despite loud statements from the country’s leadership, government forecasts indicate that the 50-billion-cubic-meter capacity pipeline will not be launched before the end of the current decade.
Analytical Summary
The situation with gas supplies to China in 2026 finally solidifies Beijing’s status as a “monopsonist” (the sole buyer) for Russian pipeline gas. The loss of the premium European market has put Gazprom in a position where it must accept almost any Chinese terms to ensure the physical sale of its raw materials.
A price gap of 30–40% compared to supplies to Turkey or Hungary means that Russia is effectively subsidizing Chinese industry at the expense of its own resources. At such prices, the profitability of Gazprom’s projects remains questionable, especially considering the need for massive capital investments in new routes.
The fact that the “Power of Siberia 2” project has been omitted from plans until 2030 deals a serious blow to the “Pivot to the East” strategy. Without this pipeline, Russia cannot replace the volumes that previously went to the EU (approx. 150 billion cubic meters annually). Consequently, by 2030, the Russian Federation risks falling into a trap: infrastructure will be rigidly tied to a single buyer dictating prices below market rates, while excess domestic production capacity will have to be mothballed.