China’s rejection of a critical gas expansion plan has plunged Gazprom deeper into crisis, threatening $179 billion in projected losses and forcing a massive corporate retreat.
At a Glance
- China rejects additional Russian gas via Kazakhstan pipeline
- Gazprom halts projects across Central Asia and Latin America
- Power of Siberia 2 pipeline through Mongolia faces new scrutiny
- Gazprom’s projected decade-long losses hit $179 billion
China Slams the Door on Gazprom
In a dramatic setback for Russia’s energy ambitions, China has rejected a proposal by Gazprom to increase natural gas exports through Kazakhstan. The plan, which would have rerouted 35 billion cubic meters of gas, was halted due to infrastructure limits. According to Eurasianet, Chinese envoy Zhang Hanhui said the current pipeline is “overloaded” and building a new one is “not realistic.”
Gazprom, already battered by sanctions and the collapse of its European customer base, had hoped to pivot eastward to stabilize revenues. But China’s refusal closes off a vital route and leaves the company scrambling for alternatives.
Watch Bloomberg’s full breakdown of the crisis at China’s Rejection of Russia’s Gas Deal.
Crippling Losses and Retreat from Global Projects
The financial picture for Gazprom is bleak. As reported by OilPrice, the company lost $7 billion in 2023 and another $10 billion in 2024. Analysts now project total losses could reach $179 billion over the next decade. The strain has already forced Gazprom to abandon international projects in Central Asia and Latin America.
“Gazprom’s gas business is suffering catastrophic losses,” reports The Moscow Times, “while the Russian budget is running out of money—about 40 percent of which Putin spends on war.”
What’s Left? Mongolia and Desperation
With Kazakhstan out, all eyes turn to the Power of Siberia 2 pipeline—a proposed 50 bcm route through Mongolia. But as detailed in Brookings, that project faces financing challenges and political uncertainty. Construction has stalled amid diplomatic hesitation and a lack of firm Chinese commitments.
Meanwhile, Europe has aggressively diversified away from Russian energy, once accounting for over half its gas imports. German economists have urged the EU to seize this moment of “historically low flows” to reduce dependency permanently.
Gazprom is now preparing drastic restructuring, potentially slashing 40% of its workforce and selling off assets to survive. As Central Asia distances itself from Moscow, and Europe fortifies energy independence, Russia’s grip on the global gas market is rapidly unraveling.
