Gazprom Boosts Gas Supplies to China by 37.4% in 2024

Gazprom increased natural gas supplies to China via the Power of Siberia pipeline by 37.4% in 2024, exceeding daily contractual obligations. China's natural gas imports rose 20.7% in the first four months of 2024, driven by lower international prices.

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Gazprom Boosts Gas Supplies to China by 37.4% in 2024

Gazprom Boosts Gas Supplies to China by 37.4% in 2024

Gazprom, Russia's state-owned energy giant, has significantly increased its natural gas supplies to China via the Power of Siberia pipeline in 2024. The company reported a 37.4% surge in gas exports compared to the previous year, with daily supplies exceeding contractual obligations.

Why this matters: This increase in gas supplies highlights the strengthening energy ties between Russia and China, which could have significant implications for global energy markets and geopolitics. As China continues to drive demand for natural gas, this trend could also impact international prices and influence the energy strategies of other countries.

This development comes as China continues to boost its imports of natural gas, with a 21% increase between January and April 2024 compared to the same period last year. The country's efforts to stockpile fuel for power plants ahead of the summer, taking advantage of lower international prices, have been a driving force behind the increased demand.

The Asian benchmark LNG prices averaged around $9 per million British thermal units (MMBtu) in the first quarter of 2024, a significant drop from the $18 per MMBtu recorded in the same period last year. This price trend has influenced China's import patterns, with strength in imports where prices were trending down and weakness where prices were moving higher.

China's natural gas imports, which include both LNG and pipeline supplies, rose 20.7% in the first four months of 2024. April imports of 10.3 million tons were slightly below March's 10.76 million but well ahead of the 8.98 million from April last year. Spot liquefied natural gas (LNG) prices for delivery to North Asia weakened in the first quarter of 2024, dropping from $11.70 per MMBtu at the end of 2023 to a low of $8.30 in the week to March 1.

The Power of Siberia pipeline, which began operations in December 2019, is a crucial component of Russia's energy strategy to diversify its gas exports and tap into the growing Chinese market. The pipeline has a capacity to transport 38 billion cubic meters (bcm) of gas per year, with plans to increase this to 61 bcm in the future.

Gazprom's increased gas supplies to China via the Power of Siberia pipeline in 2024, exceeding last year's volume by 37.4% and surpassing daily contractual obligations, highlight the strengthening energy ties between Russia and China. As China continues to take advantage of lower international gas prices to meet its growing demand, this trend is likely to persist in the near future.

Key Takeaways

  • Gazprom increases natural gas supplies to China via Power of Siberia pipeline by 37.4% in 2024.
  • China's natural gas imports rise 20.7% in first four months of 2024, driven by lower prices.
  • Asian benchmark LNG prices drop to $9/MMBtu in Q1 2024, down from $18/MMBtu in Q1 2023.
  • Power of Siberia pipeline has capacity to transport 38 bcm of gas per year, with plans to increase to 61 bcm.
  • Russia-China energy ties strengthen as China takes advantage of lower gas prices to meet growing demand.