By Bloomberg News

Jul 23, 2025 (Bloomberg) –Russia’s gas output declined in the first half of the year as higher exports to China and increased domestic demand failed to make up for lost flows to Europe via Ukraine.

The nation produced 334.8 billion of natural and associated gas through June, down 3.2% from the same period a year ago, according to Bloomberg calculations based on industrial output data from the nation’s Federal Statistics Service. Russia’s energy giant Gazprom PJSC accounts for nearly two thirds of Russia’s gas output.

The drop in production follows a halt in gas flows across Ukraine in January after Kyiv refused to extend a five-year transit agreement amid Russia’s invasion. The route was one of two remaining links to Europe after other key pipelines were shut down or damaged. Flows from Russia through Ukraine exceeded 15 billion cubic meters last year.  

China, now Gazprom’s single-largest market, has only partially compensated for the lost volumes. Gas exports to the Asian country via the Power of Siberia are expected to rise by over a fifth in 2025 compared to last year, maximizing the pipeline’s design capacity of 38 billion cubic meters per year. In the first half of the year there were days when flows exceeded Russia’s maximum contractual obligations. 

Gazprom also boosted gas exports to Slovakia via TurkStream, the last remaining pipeline route to Europe. Since April, the nation has been getting deliveries at a “multiple” of what it received in the first quarter and aims to get as much as 100% of its gas needs from Russia next year. Gazprom has also started supplying some Central Asian nations under 15-years contracts.

Natural gas consumption at home has also increased, as Russia continues to expand its domestic network to give more households and facilities access to the fuel. A cold spring in some regions contributed to higher demand. 

Still, absent major new supply deals, Russian gas output is unlikely to see a meaningful recovery. Gazprom won’t be able to send much more exports to China until 2027, when its Far Eastern route begins operations, while talks over the Power of Siberia 2 project that could double Russia’s total pipeline flows to the Asian country have stalled. 

Russia’s LNG output declined 5.1% in the first six months from a year earlier to 16.5 million tons, the Federal Statistics Service said. Moscow’s ability to significantly increase production of super-chilled fuel remained limited after the Novatek PJSC-led Arctic LNG 2 project was sanctioned. 

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