Chinese Project Entails Billions Of Dollars Of Risks For Gazprom

• 3.09.2025, 7:59

Stocks have plummeted to a record crash.

On the Moscow Exchange, Gazprom's securities went down sharply after the announcement of preliminary agreements on the Power of Siberia-2 gas pipeline. The project with a capacity of 50 billion cubic meters of gas per year should strengthen ties between Russia and China, but the reaction of investors was extremely negative. This is reported by The Moscow Times.

The company's shares lost 3.12% in Tuesday's main trading and fell to 130.7 rubles. Gazprom's market capitalization fell by about 100 billion rubles.

The drop was the strongest among all securities in the Moscow Exchange index and more than doubled the overall decline in the index itself, which fell 1.44% to 2,845.39 points, hitting a one-month low.

The parties signed only a memorandum of intentions in Beijing, but no full-fledged gas supply contract will be concluded.

Analyst of Finam Sergey Kaufman notes that even if the project is launched, it will put pressure on the company's financial position: the construction of about 2,600 kilometers will have to be financed solely at the expense of Gazprom. China has refused to share in the costs. The main stumbling block remains the price.

Alexei Gromov, director of energy direction at the Institute of Energy and Finance, said that Beijing wants tariffs at the level of domestic Russian tariffs - about $120-130 per thousand cubic meters. Moscow insists on a price in the range of 265-285 dollars.

Oil and gas market expert Mikhail Krutikhin, citing sources in the company, estimates the cost of the future construction at about 2 trillion rubles. According to him, "given the huge costs of gas transportation infrastructure and field development, we can conclude that Russia will actually continue subsidizing Chinese gas consumers at a loss to itself."