Gazprom expects China to increase gas demand, the company’s Chairman of Management Committee Alexey Miller said at the annual general shareholder meeting on Thursday.

“Chinese market watchers say that China’s gas demand will exceed 200 bln cubic meters already in 2016 and get close to 300 bln cubic meters per year by 2020,” he said.

Currently Gazprom is building the Power of Siberia gas pipeline, which will pump natural gas from the giant Chayanda oil and gas condensate deposit in Yakutia and the Kovykta gas condensate field in the Irkutsk Region in Eastern Siberia to deliver gas to the domestic market (via Khabarovsk to Vladivostok) and further on for exports to China. The pipe’s section aimed for China will be built near Blagoveshchensk. The eastern route stipulates the supply of 38 billion cubic meters of natural gas to China annually within 30 years. The project is worth $400 bln.

According to the data provided by China’s CNPC, natural gas consumption rose by 3.7% in annual terms in 2015 to 191 bln cubic meters while gas imports to China grew by 4.7% to 62.4 bln cubic meters and production went up by 3.5% to 131.8 bln cubic meters.

Europe’s demand for additional gas imports

As for Europe’s demand for additional gas imports, it will increase by at least 100 bln cubic meters per year by 2025 and may total 150 bln cubic meters by 2035, Alexey Miller believes.

“According to our estimates, Europe’s demand for gas imports will be growing further on. Already now the share of imported gas in Europe’s consumption of this type of fuel is nearing 50% while by 2025 Europe’s demand for additional imports will rise by at least 100 bln cubic meters per year and may stand at 150 bln cubic meters by 2035,” he said.

According to Miller, judging by last year’s results pipeline gas is in higher demand than liquefied natural gas (LNG). “Hardly a fourth of LNG regasification capacities is loaded while the Nord Stream’s load level has been rising despite regulators’ restrictions. In 2015 it passed the 70% mark. Our 2015 supplies to Germany only exceeded the volume of all LNG imports to all EU countries,” he said.

Gas output

Miller went on to say that Gazprom’s potential production exceeds real production by 150 bln cubic meters of gas per year.

“In 2015, the highest level of daily gas output of enterprises owned by Gazprom group stood at 1.556 bln cubic meters while the potential annual production of Gazprom exceeds actual production by more than 150 bln cubic meters,” he said.