Putin Plans to Increase Gas Sales to China

(Reuters) — President Vladimir Putin said on Thursday that Russia would increase gas supplies to "the East", particularly China, and set prices for sales to Europe using an electronic platform.

Moscow is looking to boost gas sales to countries such as China and Turkey as the Ukraine conflict sours trade with the West, but building the infrastructure could take years.

In October, Putin floated the idea of setting up a "gas hub" in Turkey following explosions that damaged Russia's Nord Stream gas pipelines under the Baltic Sea and halted its direct gas sales to Germany.

"Among the key growing consumers of Russian gas are our neighbors, including Turkey ... We plan to set up a gas hub in coming years," Putin told a televised meeting with officials.

"But if we are talking about setting up an electronic platform, then this can be done within the next few months. And it is there, to a large extent, that we will determine the final price for our European consumers, because what they have done on their platforms is madness."

Putin has criticized Europe for choosing spot pricing mechanisms for gas instead of long-term contracts, which used to be the backbone of gas exports by Russia's Gazprom GAZP.MM and give the Kremlin-controlled company more certainty.

Putin did not give any details of the proposed platform.

He also said Russia would boost gas sales to "the East".

Russia started selling natural gas to China at the end of 2019 via the Power of Siberia Pipeline, which supplied about 10 billion cubic meters (Bcm) of gas in 2021 and is due to reach its full capacity of 38 Bcm in 2025. Russia is now Beijing's No. 3 gas supplier,

In February, Putin reached an agreement to sell 10 Bcm of gas to China from Russia's Far East. Russia also plans to construct a new pipeline, the Power of Siberia 2, via Mongolia with a view to selling an additional 50 Bcm of gas per year.

Putin said the projects would allow Russia to boost its gas sales to China to 48 Bcm annually by 2025 and to 88 Bcm by 2030.

"In fact, this is more than 60% of gas supplies to the West last year," Putin said, referring to the 88 Bcm.

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