Russia's Gazprom forecasts core profit to rise 6-7% in 2026

• Gazprom supplied 38.8 billion cubic metres of gas to China via the Power of Siberia pipeline in 2025, with an agreement reached during Putin's September visit to increase annual volumes by 6 bcm to 44 bcm
• The company has been forced to pivot from its once-dominant position in the European gas market due to deepening economic and political rifts with the West since 2022
• Efforts to significantly expand China exports have faced obstacles over pricing disagreements and other unresolved issues

Summary

Key Development: Russian energy giant Gazprom forecasts a 6-7% increase in core earnings (EBITDA) for 2026, driven by higher domestic sales and expanded exports to China. The company reported 2025 EBITDA of 2.9 trillion roubles ($37.7 billion).

Growth Drivers:

• Domestic gas supplies expected to rise 2%-4%
• Increased exports to China via the Power of Siberia pipeline
• Annual pipeline volumes set to grow from 38.8 billion cubic meters (bcm) in 2025 to 44 bcm following a September agreement during President Putin's China visit—an additional 6 bcm increase

Market Context: Once Europe's dominant natural gas supplier, Gazprom has been forced to pivot away from European markets since Russia's 2022 conflict with Ukraine created deep economic and political rifts with the West. The company is actively diversifying its export strategy toward Asian markets.

Challenges: Deputy CEO Famil Sadygov acknowledged that efforts to significantly expand Chinese exports have encountered obstacles, including disagreements over pricing and other commercial issues.

Strategic Implications: Gazprom's shift from European to Asian markets represents a fundamental restructuring of global natural gas trade flows. The company's ability to achieve projected growth depends heavily on successfully navigating complex negotiations with China and sustaining domestic demand growth. The modest 6-7% EBITDA growth forecast suggests continued challenges in replacing lost European revenue streams, despite progress in eastern market development.