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Russia’s Natural Gas Production Fell By 12.3% In March

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Russia's Natural Gas Production Fell By 12.3% In March

A general view of the construction site of Amur gas processing plant, part of Gazprom’s Power Of Siberia project outside the far eastern town of Svobodny, in Amur region, Russia November 29, 2019. Picture taken November 29, 2019. REUTERS/Maxim Shemetov.

Russia’s natural gas production fell by 12.3% in March in annual terms to 59.41 billion cubic metres, according to a report by The Institute of Natural Monopolies Research.

Russia’s gas export to non-CIS states decreased by 17.7%, to 13.3 billion cubic meters. In addition to the COVID-19 outbreak, this is an abnormally warm winter and record gas reserves in storage facilities.

Meanwhile, the price at which Gazprom sells gas to China through the Power of Siberia gas pipeline was revealed.

According to data of China’s General Administration of Customs and Russia’s Federal Customs Service, the cost of Russian gas going to China through the Power of Siberia gas pipeline in January-February 2020 was $203 per thousand cubic meters.

In 2014, when the agreement on the construction of the Power of Siberia was signed, Gazprom refused to reveal the formula by which the price for China will be calculated and the gas price itself. Then, experts said that the price should be $350-385 per thousand cubic meters.

However, now, Russia is selling natural gas to China 1.5 times cheaper than it was expected.

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