A Shift Toward the East with Setbacks: Why Asia Is Not Replacing Europe
21 April 20:48
The Russian government plans to sell natural gas to China by 2029 at prices significantly lower than those charged to European buyers. This is reported by Bloomberg , according to [Komersant].
According to the publication’s estimates, as early as 2026, the price will be around $258 per thousand cubic meters, which is more than a third cheaper than for Europe.
Even by the end of the decade, this gap will remain significant, indicating a long-term shift in pricing policy.
Formally , Gazprom attributes this to geography. Gas for China is supplied from fields located closer to the country, so transportation costs are lower.
However, the real reason appears to be broader. China has a stronger negotiating position because Russia has lost a significant portion of its alternative markets. Additionally, long-term contracts often include stricter terms and lower prices.
What does this mean for Russia
The price drop highlights the main problem with the new strategy. The pivot to Asia is not yielding the financial returns that the European market provided.
Russia is forced to sell at lower prices to maintain export volumes. As a result, even as shipments increase, overall profitability is falling.
Gas supplies to China are growing rapidly via the Power of Siberia pipeline.
In 2025, it reached its design capacity of 38 billion cubic meters. By 2029, volumes could grow even further and exceed 50 billion cubic meters.
This is happening thanks to contracts with China National Petroleum Corporation and the development of new infrastructure.
At the same time, there is a sharp decline in exports to Europe
While Russia supplied up to 200 billion cubic meters of gas there annually until 2022, volumes could drop to approximately 30 billion by the end of the decade.
Individual countries, such as Hungary, Slovakia, Serbia, and Turkey, continue to import, but the overall trend remains downward.
At the same time, the European Union plans to completely phase out Russian gas by 2027.
Despite the decline in pipeline supplies, Russia still generates revenue from gas exports, particularly through the sale of liquefied natural gas to Europe.
According to the publication, in 2026 the price will be around $258.8 per 1,000 cubic meters, which is more than 38% cheaper than for customers in Europe.
Even by 2029, the difference will remain at over 27%.
