Russia’s pipeline gas shipments to China are set to increase by about 25% this year, as Moscow continues to pivot its energy exports toward Asia, deepening ties with the world’s largest energy consumer,  a source familiar with the data told Reuters.

However, the rise in export volumes is not expected to compensate for the sharp drop in revenue following the loss of the European gas market, based on Reuters’ calculations.

Since the outbreak of the war in Ukraine in 2022, Russia has redirected most of its oil exports to India and China after relations with Europe—once its largest commodity market and a key source of income—deteriorated.

During President Vladimir Putin’s visit to China in September, Moscow and Beijing agreed to boost annual gas flows via the original route by a further 6 billion cubic meters (bcm), raising total deliveries to 44 bcm per year. The two sides also endorsed the proposed Power of Siberia 2 pipeline, a project that could eventually supply an additional 50 bcm of Russian gas annually via Mongolia.

However, progress on Power of Siberia 2 remains uncertain, with pricing disagreements over Russian gas still unresolved.

In addition, China has agreed to increase imports via a separate pipeline from Russia’s Sakhalin Island in the Far East, lifting contracted volumes to 12 bcm per year from the previously agreed 10 bcm. This route is expected to come online in 2027.

Recently, anonymous sources unveiled that India’s purchases of Russian crude are expected to top 1 million barrels per day (mmbl/d) in December, countering earlier forecasts of a steep drop as refiners return to buying from non-sanctioned producers offering heavy discounts.