Beijing refused to invest in the Russian Gazprom project for a 2,600-kilometer-long pipe.
Points of attention
- China has refused to invest in a new 2,600-kilometer Russian gas pipeline.
- The construction of the gas pipeline is estimated at $25 billion and will be a financial challenge for Gazprom.
- Without Chinese investment, Gazprom will have to finance the project on its own.
China does not want to build a joint gas pipeline with Russia
The Kremlin has been seeking approval from China for a new gas pipeline, which could compensate Gazprom for about a fifth of its lost exports to Europe, for almost 20 years.
During the meeting in Beijing, the parties limited themselves to a memorandum of intent - a contract for gas supply has not yet been signed.
Gazprom will have to finance the 2,600 km long pipeline project on its own. The final price has not yet been agreed: China insists on the level of domestic Russian tariffs — $120-130 per thousand cubic meters, while Moscow offers a range of $265-285 — similar to the Power of Siberia-1.
Construction is estimated at $25 billion and will significantly increase financial pressure on Gazprom, which effectively subsidizes Chinese consumers.
According to intelligence, the Russian corporation's gas business remains unprofitable today. Last year, its losses amounted to $11.6 billion, and in the first half of this year they have already reached $134 million.
Gazprom's cash reserves are decreasing for the third year in a row: from $33 billion at the beginning of 2022 to $6.7 billion in June 2025.
After the news of the signing of the memorandum, Gazprom shares fell sharply, and capitalization decreased by $1.24 billion.
