$25 Billion into the Pipe: Investors Do Not Believe in the kremlin’s Gas Project

For almost two decades, the kremlin has been seeking China’s approval for a new gas pipeline that could compensate Gazprom for about a fifth of its lost exports to Europe. But in Beijing, the parties limited themselves to a memorandum of intent – there is still no contract for gas supplies.

Gazprom will have to finance the 2,600 km pipeline project on its own: Beijing has refused to invest. The final price has not been agreed upon either. China insists on domestic russian tariffs of $120–130 for one   thousand cubic meters, while moscow offers a range of $265–285 – similar to “Power of Siberia-1”.

The construction is estimated at $25 billion and will significantly increase the financial pressure on the company, which is effectively subsidizing Chinese consumers.

Gazprom’s gas business remains unprofitable: losses amounted to $11.6 billion in 2024 and another $134 million in the first half of 2025. The company’s money reserves have been declining for the third year in a row, from $33 billion at the beginning of 2022 to $6.7 billion in June 2025. Following the news of the memorandum signing, Gazprom’s shares fell sharply, and its market capitalization declined by $1.24 billion.