(Bloomberg) -- Russia’s focus on boosting natural gas exports to China is proving less lucrative for the nation than its former reliance on westbound deliveries to European markets.

Gas prices for the Asian nation are expected to be as much as 28% below those for Russia’s remaining European clients at least through 2027, according to the economic outlook prepared by the Economy Ministry and seen by Bloomberg News. 

The outlook indicates the financial drawback to Moscow’s intensive efforts to build energy ties with China amid the standoff with the West over its annexation of the Crimean peninsula, followed by the invasion of Ukraine. Even before the invasion, the Russian gas giant Gazprom PJSC said it saw the Asian nation as a future-growth market, expecting demand in European markets to shrink by the end of this decade.

This year, the ministry sees the price of gas exports to China at $257 per 1,000 cubic meters compared with $320.30 for flows to western markets, according to its base-case scenario. From 2025 and through 2027, the price for China is set to gradually decrease, while that for westbound deliveries is forecast to remain roughly flat, the outlook shows.

Russia’s Economy Ministry media service didn’t immediately respond to a Bloomberg News request for comment.

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Gazprom currently supplies gas to China directly via the Power of Siberia pipeline, and will gradually ramp up the volume to the planned annual maximum of 38 billion cubic meters next year. In 2022, just before the invasion to Ukraine, the Russian gas producer signed a second deal to deliver 10 billion cubic meters a year to China, with flows scheduled to start by 2027.

Gas exports are set to increase further as Russia and China discuss the potential Power of Siberia 2 link that would lift Gazprom’s deliveries to a total of 98 billion cubic meters per year. Still, even if the plans materialize and all three pipelines operate at full capacity, they will carry only roughly half of what Russia used to send to Europe before the war in Ukraine.

Gazprom still exports pipeline gas to several European nations and Turkey, yet last year the flows to Europe dropped to the lowest level since the early 1970s to total some 45 billion cubic meters, according to estimates from the International Energy Agency. That’s a fraction of the record 201 billion cubic meters shipped westward in 2018, Gazprom data show.  

Under the ministry’s base-case scenario, Russia’s total gas exports will grow at least through 2026, supported by a hike in gas production after the 2022 slump, the outlook shows. 

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