Gazprom shares sink to record low as China pivot fails to halt the decline
Russia's state gas monopoly has signed two China pipeline deals and still cannot arrest the slide that began when Europe cut off its gas purchases.
Gazprom shares closed at an all-time low on Friday (2026-07-17), extending a decline that has erased the bulk of the company's value since it lost Europe as a reliable paying customer. The company's 2023 revenue fell to 8.5 trillion rubles, a significant drop from prior years as European gas sales collapsed. Three years of bilateral pipeline deals with Beijing have not closed that gap.5
Russia and China signed a legally binding construction agreement on Tuesday (2026-05-19) for the Power of Siberia 2 pipeline, with Gazprom chief executive Alexei Miller confirming the deal. The route, traversing Mongolia, is designed to carry 50 billion cubic meters of gas annually.4,2 The signing followed a 30-year, $400 billion supply framework, with Russia committing some $55 billion to upstream exploration and pipeline infrastructure.1
Investors remain unconvinced. Despite those commitments, Gazprom shares have continued to fall, and the commercial terms that will determine the company's returns from the new route are still unresolved. As of Tuesday (2025-08-26), Russia and China had given their blessing to Power of Siberia 2 but had not agreed a price, Reuters reported.6
The existing Power of Siberia 1 link offers some context for what the ramp-up could look like. The 3,000-km pipeline from eastern Siberia to northeast China shipped 38.8 billion cubic meters in 2025, up around a quarter year-on-year and above its planned annual capacity of 38 bcm.3 A deal struck during Putin's September 2025 China visit raised the annual target to 44 bcm; a February 2022 Sakhalin Island agreement commits China to buying up to 10 bcm a year by 2027.3
Yet even the accelerating volumes on existing routes have not reversed the share price decline. China holds the negotiating leverage. Beijing has time, has domestic coal as a competing energy source, and has shown no urgency to pay European-style prices for Russian supply.2
Vita Spivak, an energy analyst at Control Risks, argues that China will need more gas in coming years as it phases down coal consumption, a genuine pull factor over the long run.2 But long-run demand growth does not guarantee the contract terms that would restore Gazprom's margins.
Gazprom shut down the Nord Stream pipeline to Germany in August 2022, citing maintenance requirements, and has not resumed flows.7 Moscow and Beijing had declared a "no limits" partnership just days before Russia's invasion of Ukraine in February 2022, framing the shift east as strategic intent.3 Three years into that pivot, Gazprom equity has reached its lowest recorded point.5
The pricing terms for Power of Siberia 2 are the most concrete unresolved variable for any attempt to value the company. Until Russia and China disclose what Beijing will pay per cubic meter, investors have no basis for modelling the pipeline's cash contribution. Given China's track record at the negotiating table, a price below what European buyers once paid looks like the base case — and if that is confirmed, the volumes flowing east will generate revenue but will not restore the margins that once underpinned Gazprom's valuation.1,2