Gazprom increases gas sales to China; Russia's ESPO oil exports from Far East port at all-time high

On December 16, the daily volume of gas supplied by Russia's Gazprom gas corporation to China via the Power of Siberia pipeline reached a record high.

suc-manh-siberia-nga-trung-cung-co-loi-cung-thang-2

Gazprom Group significantly increased gas supplies to China. (Source: Bloomberg)

TASS news agency quoted Gazprom's announcement stating: On December 16, the amount of gas flowing through the Power of Siberia pipeline exceeded the daily contractual obligation.

According to the announcement, gas supplies to Beijing are carried out under a long-term bilateral gas purchase agreement between Gazprom and China National Petroleum Corporation (CNPC).

Previously, Gazprom said that since mid-November, the corporation has significantly increased the volume of gas supplied to China under the additional agreement that the two sides had previously signed.

* Not only gas, Russian oil is also "flocking" to China. Energy analysis company Kpler said that Russian ESPO oil exports from the Far Eastern port reached an all-time high of 925,000 barrels/day in December 2023.

Of these, 85% of the barrels were shipped to China.

Industry experts say the rising trend in exports of this crude oil is due to increased rail supply.

From 2022, Moscow will diversify its energy supplies in response to Western sanctions after the European Union (EU) imposed a ban on its oil tankers passing through the bloc's maritime corridor.

Russian oil companies then rerouted East Siberian crude supplies to Asia and resumed rail transport – which had been little used in recent years because of high costs.

“We are preparing to restore the export of ESPO crude oil by rail, which previously only transported about 15 million tons of oil,” Nikolay Tokarev, head of Transneft, Russia’s state-owned oil pipeline transport company, said earlier this year.

Moscow oil exporters benefit from increased exports of ESPO crude, which is currently trading at a premium to the Urals blend, Kommersant reported.

In addition, ESPO oil is more profitable than other oils because the shipping route to China is relatively short.

Source