China Secures Massive Discount On Russian Gas As Moscow’s Leverage Weakens

Authored by Eurasianet via OilPrice,

• Russian government projections show China paying approximately 56% less for Russian natural gas than other foreign customers outside the former Soviet Union in 2026.
• Chinese companies are advancing major copper, port infrastructure, energy, and technology initiatives across Central Asia.
• Beijing is strengthening its regional influence through investments, digital connectivity, and partnerships with Central Asian governments.

Russia is giving China a huge discount on natural gas purchases, underscoring the Kremlin’s fiscal dependency on Beijing. The Moscow Times (MT), citing Russian Duma documentation, shows that China will pay an average of approximately $248 per thousand cubic meters of pipeline gas in 2026, compared with $562 for Gazprom’s other foreign customers outside the former Soviet Union. 

That means Beijing is receiving as much as a 56 percent discount on its purchase price. The steep discount appears to be the cost of Beijing’s ongoing political support for the Kremlin’s war effort in Ukraine. 

Given the Western sanctions regime and the European Union’s efforts to reduce its reliance on Russian gas, China’s purchases are a crucial source of funds needed to keep Russia’s war machine going. Russia hopes to reduce the discounts in the coming years, according to the MT report. To put Russia’s weak negotiating position into context, an estimate published by Carnegie’s Russia Eurasia Center showed China is paying up to $60 per tcm more to Turkmenistan than the Russian purchase price. 

Meanwhile, talks of creating a “Power of Siberia 2” pipeline have stalled over a pricing dispute, according to Beijing-connected media reports. “It’s much harder for Russian negotiators today,” Sergei Vakulenko, a senior fellow at Carnegie, wrote in the estimate. “On the one hand, the growing confrontation between the United States and China, and the instability in the Middle East, should push China into reducing LNG imports in favor of pipeline gas, which would likely be to Moscow’s advantage,” Vakulenko stated. “On the other hand, the break with Europe has left Gazprom with huge gas reserves in Siberia’s Yamal Peninsula that are ready to be exploited but have no customers, significantly strengthening China’s position.”

Central Asia

Chinese Premier Li Qiang traveled to Central Asia on October 17-19, visiting Uzbekistan and Tajikistan. The tour produced deals with both Uzbekistan and Tajikistan, including for a non-ferrous metallurgy industrial cluster in the Sughd region. For more about Li’s visit, see this Eurasianet report.

China’s Institute of East European, Russian, and Central Asian Studies (IREECAS), a major government think tank that informs Beijing’s regional policymaking, co-organized a China-Central Asia forum in the Kyrgyz capital Bishkek for regional scholars and experts. The meeting focused on the “preparation of practical recommendations” for regional governments on a wide range of domestic and international policies. IREECAS also held a joint event with Uzbekistan’s presidential think tank, ISRS, in Tashkent, focusing on government efforts to promote artificial intelligence and digital transformation. At the conclusion of the gathering, IREECAS and ISRS announced the signing of a program of joint events and initiatives for 2027. IREECAS’s activities fit into China’s growing push to exert influence on the direction of Central Asian states’ domestic and international policymaking.

Kazakhstan

Kazakh President Kassym-Jomart Tokayev launched construction of a $1.8 billion copper smelter at the Aktogay deposit in Kazakhstan’s Abai region. The project, developed by Kazakh mining company KAZ Minerals, with NFC, a subsidiary of China Nonferrous Metal Mining Group (CNMC), is designed to produce 300,000 tons of copper cathodes annually, alongside gold and sulfuric acid, and is expected to create more than 1,000 jobs. First production is scheduled for 2030. Tokayev separately met with CNMC Chairman Wen Gang, who pledged to complete construction on schedule and expand cooperation in workforce training. However, a Chinese corporate disclosure dated October 21 indicates that NFC’s Kazakh entity has signed only a preparatory-work agreement, capped at 4.52 billion tenge (about $10 million), and that the full construction contract remains unsigned. KAZ Minerals and NFC also signed a memorandum of understanding on geological exploration and mineral-resource assessment in Kazakhstan, according to the official state news agency Kazinform. The companies plan to explore the use of remote sensing, geophysical and geochemical surveys, artificial intelligence, and three-dimensional geological modeling to reassess historical geological data and identify potential drilling sites. The memorandum also provides for possible specialist training, joint research, and educational programs, with a cooperation roadmap to be developed. No financial commitments, specific exploration sites, or implementation deadlines were disclosed.

Kazakhstan’s national investment holding Baiterek JSC announced the signing of an MoU with the Chinese firm Guoyou Materials Group covering a $1 billion investment to develop the port of Kuryk, a major Middle Corridor hub on the Caspian Sea’s Kazakh shore. The project’s first phase envisions the creation of a multifunctional terminal with a capacity of 15 million tons of cargo per year.

Kazakhstan’s Ministry of Water Resources and Irrigation reported that 25 Kazakh water-sector specialists are currently participating in training programs in China focused on irrigation modernization, water-saving technologies, digital water management, and small hydropower.

Kazakhstan’s Committee for National Security (KNB) reported that it detained 13 Chinese nationals allegedly operating an international online fraud scheme out of Kazakhstan that targeted individuals in other countries. The KNB officials noted that they conducted their investigation jointly with China’s Ministry of Public Security, which identified some suspects as wanted for similar offenses in China. All 13 suspects were transferred to Chinese custody to await prosecution.

Kazakhstan received observer status in the China-initiated Alliance for Cultural Heritage in Asia, according to Kazinform. Some observers see the organization as designed to advance state-led historical narratives and promote the strategic use of cultural heritage as a diplomatic tool. Kazakhstan proposed expanding cooperation in the sphere of specialist training, AI-assisted monitoring of cultural heritage sites and joint archaeological research along the Silk Road. No specific funding commitments or projects were announced.

Uzbekistan

Uzbekistan’s Chamber of Commerce and Industry held an economic conference in Tashkent with a delegation from the Chinese city of Shihezi in Xinjiang Province to discuss expanding bilateral cooperation, investment, and joint projects. The conference yielded several agreements covering logistics, construction, energy, and technology sectors. No details were immediately disclosed.

China is trying to take some energy-sector business away from Russia. The heads of Uzbekistan’s largest state-run oil and gas company, Uzbekneftegaz, and China’s largest oil and gas producer, CNPC, held talks in Tashkent to discuss expanding energy-sector cooperation. CNPC expressed readiness to help Uzbekneftegaz diversify petroleum product supplies and establish a permanent representative office in Tashkent. Russia has reduced its supply of oil-based products to Central Asian states in recent months, due to the destruction of energy infrastructure by Ukrainian drones.

Tajikistan

Tajikistan’s national telecom operator, Tajiktelecom, and the PRC’s largest telecom operator, China Mobile, launched the Tajikistan-China International Digital Corridor, a fiber-optic line that runs 1,010 km from Dushanbe through Khorog to the Kulma Pass, where it joins China Mobile’s 6,100 km network to Beijing, Tajik authorities report. The initial capacity is 1 Tbps, but it is expected to rise to 10 Tbps in the coming years. Tajikistan sees it as a step toward its ambition of becoming a hub of the Digital Silk Road and a leading regional AI player.

Tajikistan’s Ministry of Energy and Water Resources signed an MoU with Xinjiang Shouhai Power Development, a Chinese energy company, to explore the hydropower potential of the Obihingou River, Tajikistan’s official news agency Khovar reports. According to a Soviet-era assessment, the river has an estimated annual hydropower-generating capacity of 2.6 gigawatts.

Turkmenistan

Ashgabat hosted a trade and economic forum involving companies from the PRC’s Shanxi Province, Orient.tm reports. The forum resulted in the signing of two comparatively minor contracts between Turkmen and Chinese companies.