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 Ukrainian".
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%.
What this means
The price difference highlights a key problem:
- the shift of exports to Asia does not compensate for the loss of the European market;
- China, despite growing purchase volumes, is a less profitable partner;
- Moscow is effectively forced to sell at lower prices to maintain demand.
Why is gas cheaper for China
Gazprom’s official explanation is that the fields supplying gas to China are located closer to the consumer, resulting in lower transportation costs.
However, analysts point to other factors as well: China’s stronger negotiating position, Russia’s limited choice of markets, and long-term contracts with more fixed prices.
Volumes: Growth Toward the East
Russia is increasing supplies via the Power of Siberia pipeline:
- in 2025, it reached its design capacity of 38 billion cubic meters;
- by 2029, supplies to the East could rise to 52.5 billion cubic meters.
Growth is expected thanks to new contracts with China National Petroleum Corporation, infrastructure expansion, and new routes.
Europe: a sharp decline
At the same time, supplies to Europe are declining:
- an expected 32 billion cubic meters per year in 2028–2029;
- for comparison: up to 200 billion cubic meters by 2022.
Despite this, some countries continue to import:
- Hungary
- Slovakia
- Serbia
- Turkey
At the same time, the European Union plans to completely phase out Russian gas by 2027.
Financial aspect
Despite the decline in pipeline supplies:
- Russia still receives revenue from gas exports;
- specifically, from LNG sales to the EU—about €7.2 billion per year.
However, the overall picture is:
- lower volumes lower prices = reduced profitability.
The broader context
Following Russia’s full-scale invasion of Ukraine, most energy ties with the West were severed. Russia has been forced to restructure its export model, and Asia has become a key market, albeit on less favorable terms.
