In 2014, more Central Asian gas was delivered to China than to Gazprom for the first time. With Gazprom cutting its purchases, the dependence on the Chinese market could already be of concern. Slower Chinese demand growth is compounding this anxiety. Moreover, in the current low oil price, supplies are struggling to compete with LNG in coastal China. Central Asian gas production will grow over the next decade, but regional governments are under pressure to find alternative monetisation options.
Table of contents
Gazprom cuts Central Asia’s most reliable export revenues
China is the key export market, but near-term growth is under threat
Spot LNG more attractive than China’s piped imports at US$60/bbl...
while oil price fall is now working through to LNG contracts with lagged indexation
Reduced Gazprom purchases hit Turkmenistan and Uzbekistan state revenues