- Russian gas giant Gazprom sent more natural gas to China than Europe in the first nine months of the year.
- Europe had previously been Russia's biggest energy customer, but flows have cratered since the war in Ukraine began.
- Gazprom plans to ramp up flows to China in the coming years and months.
Russian gas flows to Europe are dwindling, but China is stepping in and is set to become Russia's biggest customer of pipeline gas this year.
Gazprom, Russia's state-owned energy giant, exported 23.7 billion cubic meters of natural gas to China in the first nine months of the year, up 40% from the same period a year earlier, according to Bloomberg.
Those flows surpass the 22.5 billion cubic meters of pipeline gas exported to Europe in the same period, putting China on track to overtake Europe as Russia's biggest natural gas customer in 2024.
The increased flows to China come as Gazprom has become increasingly reliant on energy demand from the world's second-largest economy. Europe had long been Russia's biggest energy partner and once received as much as 40% of its gas from Moscow, but flows have declined since the invasion of Ukraine in 2022.
Since the invasion, Europe has placed a host of restrictions on Russian gas flows to the continent, leading Gazprom to post its first annual net loss since 1999 and a 40% drop in gas revenue last year.
Gazprom said recently that it likely won't recoup sales lost to the war for at least a decade, though some EU countries like Hungary, Slovakia, and Austria continue to rely on Russian energy products.
Meanwhile, Gazprom's agreement with Ukraine's state-run energy firm is set to expire in December, and if Ukraine doesn't renew it, about half of gas flows to Europe could be stalled. That could result in Russia losing as much as $6.5 billion a year.
Gazprom's relationship with China could strengthen in the coming months amid a host of plans to increase trade.
After an agreement last month, the company plans to ramp up its use of the Power of Siberia pipeline to its full export capacity later this year, slightly earlier than previous targets for early next year. The move would increase daily flows toward the maximum contract level of 38 billion cubic meters a year.
Gazprom is also plotting several new links to China, including one from Russia's far east that would export a maximum capacity of 10 billion cubic meters a year, set to launch in 2027. Another link, Power of Siberia 2, is under discussion and would increase the country's gas flows to China to almost 100 billion cubic meters a year.