Gazprom Gas Infrastructure Pivot, 38.8 bcm to China, a $400 B Power of Siberia Deal, and 2 Pipeline Agreements (2025 to 2026)

Gazprom’s Market Realignment, 38.8 bcm to China and 15% Growth in Uzbekistan (2025-2026)

Gazprom’s strategy, framed as sustainability, is a corporate survival pivot driven by the loss of its primary European markets, forcing a decisive reorientation toward Asia. This shift is not defined by decarbonization targets but by concrete natural gas supply agreements and infrastructure projects designed to replace lost revenue and secure long-term offtake for its core fossil fuel business.

• In 2025, Gazprom delivered a record 38.8 billion cubic meters (bcm) of natural gas to China through the Power of Siberia pipeline, exceeding the pipeline’s design capacity and solidifying China as its new anchor market.
• The company is expanding its footprint in Central Asia, with gas deliveries to Uzbekistan increasing by 15% to nearly 6.5 bcm in 2025, demonstrating a strategy to develop secondary markets and transit routes.
• Forward-looking agreements reinforce this pivot, including a Memorandum of Understanding (Mo U) signed in September 2025 for the Power of Siberia 2 pipeline, which plans to deliver an additional 50 bcm per year to China.
• A new pipeline project was initiated through a memorandum with Kazakhstan in October 2025, further building out the physical infrastructure required to redirect gas flows eastward and away from Europe.

37% CAPEX Cut, Gazprom Reallocates Capital to Eastern Pipelines

The strategic pivot to Asia is underpinned by a significant financial realignment, characterized by sharp capital expenditure reductions and a focused reallocation of funds to essential infrastructure. This financial discipline is a form of corporate sustainability aimed at preserving cash flow and concentrating investment on projects with guaranteed future returns, rather than speculative environmental ventures.

• Gazprom Group’s capital expenditure (CAPEX) was cut by nearly 37% in Q 1 2026, falling to 403 billion rubles from 640 billion rubles in the same period of 2025, reflecting a stringent policy to conserve capital.
• The company’s approved investment program for 2026 is set at RUB 1.1 trillion (approximately $11 billion), a substantial decrease from the RUB 1.615 trillion ($20.38 billion) allocated for 2025.
• This disciplined spending prioritizes the completion of key gas transportation and processing projects critical to fulfilling new supply commitments to Eastern markets.
• As part of this focus on core assets, Gazprom officially withdrew from a planned $297 million gas-fired power plant project in Vietnam in June 2026 after years of inactivity, signaling a divestment from non-core international assets.

Table: Gazprom Investment and Divestment (2025-2026)

Strategic Alliances, Gazprom’s China and Kazakhstan Agreements

Gazprom’s partnerships over the last year have been almost entirely dedicated to establishing the commercial relationships and physical infrastructure required to facilitate its eastward export strategy. These alliances secure long-term demand for its natural gas and build the transit routes necessary to deliver it, while nominal technology partnerships serve as a long-term hedge.

• The alliance with China was cemented with the September 2025 agreement for the Power of Siberia 2 pipeline, a project designed to move up to 50 bcm of gas annually and make China the undeniable center of Gazprom’s export strategy.
• In October 2025, Gazprom and the government of Kazakhstan signed a memorandum for a new cross-border gas pipeline, a critical infrastructure partnership to strengthen its access to Central Asian markets and create a potential new transit corridor to China.
• A technology partnership was formed in December 2025 between subsidiary Gazprom Neft and Khalifa University in the UAE to conduct joint research on carbon capture and hydrogen, representing a minor but strategic exploration of decarbonization technologies.

Table: Gazprom Strategic Partnerships (2025)

Asia vs. Europe, Gazprom’s New Geographic Export Focus

Gazprom’s operational geography has been fundamentally redrawn, with Asia, led by China, decisively replacing Europe as the center of its export strategy and future revenue growth. While toeholds in southeastern Europe remain, all significant investment and commercial activity is now directed eastward.

• China is now the undisputed priority, confirmed by the 38.8 bcm supplied in 2025 via the Power of Siberia pipeline and the planned 50 bcm/year capacity of the future Power of Siberia 2.
• Central Asia has emerged as a key secondary growth region, evidenced by the 15% increase in gas exports to Uzbekistan and the new pipeline agreement with Kazakhstan, which serves both as a market and a potential transit hub.
• In Europe, Gazprom’s position has become tenuous. A long-term supply deal with Serbia was not renewed, replaced by short-term extensions, highlighting the difficulty in securing stable, long-term contracts in the region.
• Turkey remains a significant market, receiving a combined 18.1 bcm in 2025 through the Turk Stream and Blue Stream pipelines, making upcoming contract renegotiations for this remaining European anchor critically important.

Gazprom Technology Deployment, Pipeline Efficiency Over Green Hydrogen

Gazprom’s technology deployment is centered on optimizing existing fossil fuel operations to reduce costs and emissions, while next-generation low-carbon solutions remain in the early research phase with no clear path to commercial scale. The company’s focus is on the technological leadership of its core gas business, not a transition to new energy sources.

• Gazprom’s primary technology application is in operational efficiency. It has implemented gas-saving technologies during pipeline repairs that have reportedly reduced specific greenhouse gas emissions by over 10% and saved billions of cubic meters of gas.
• Carbon Capture and Storage (CCS) is a declared part of the company’s long-term strategy, supported by investment and the R&D partnership with Khalifa University, but it remains a pre-commercial initiative to address the carbon intensity of its product.
• Exploration into hydrogen remains in the nascent R&D stage through its university partnership, with no significant capital allocated for pilot or commercial projects.
• This limited focus is contextualized by a broader trend in Russia, where many planned low-carbon hydrogen projects have been stalled or canceled as of July 2026 due to mounting costs, indicating they are not a near-term strategic priority.

SWOT Analysis, Gazprom’s Vast Reserves vs. Geopolitical Risk

Gazprom’s fundamental strength is its control over a massive share of the world’s natural gas reserves, providing a powerful long-term competitive advantage. However, this is acutely counterbalanced by its increasing dependence on a single major customer and profound geopolitical vulnerabilities that have reshaped its entire business model.

Table: SWOT Analysis for Gazprom’s Strategic Pivot

Gazprom’s Critical Path, Securing the Power of Siberia 2 FID

The single most critical event shaping Gazprom’s future is the finalization of a binding agreement and Final Investment Decision (FID) for the Power of Siberia 2 pipeline. This project is the cornerstone of its entire strategic pivot, and its successful execution will determine the company’s financial stability and market position for decades.

• The primary signal to watch is the signing of a legally binding, long-term gas supply agreement with China for the 50 bcm/year Power of Siberia 2 project, moving beyond the current Mo U.
• Progress on the pipeline’s transit agreement through Mongolia is another key indicator, as it is a necessary precursor for construction to begin.
• Monitor how Gazprom addresses the EU Methane Regulation for its remaining supplies via Turk Stream. Compliance or non-compliance will signal its approach to evolving environmental standards in legacy markets.
• The impact of the anticipated global LNG supply wave in 2026 will test Gazprom’s pricing power and the competitiveness of its pipeline gas against a more liquid and potentially lower-priced global market.

The questions your competitors are already asking

This report covers one angle of Gazprom’s commercial trajectory. The questions that matter most depend on your work.

• Power of Siberia 2 final agreement status
• China natural gas demand forecast
• Global LNG supply increase 2026
• Gazprom Turkey gas contract negotiations

This report does not answer these. Enki Brief Pro does.

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