Gazprom has asked the Russia government to cancel already issued contracts to sell gas to China. This from the BBC….

Russian energy giant Gazprom has asked the government to cancel an agreement to pipe large quantities of gas to China from fields in Siberia.

Alexander Ananenkov, the group’s deputy chief executive, said plans to deliver 80bn cubic metres of gas a year to China would leave Russia short.

Needless to say, these are not Gazprom contracts that Gazprom wants canceled. Exxon Mobile, Rosneft, and Videsh own the field that was to ship the gas to China. That makes me wonder about Gazprom supposed justification. If the contracts are torn up, it means that the gas has to be sold to Gazprom (because they are the ones that supply the domestic Russian market). So is Russia really running out of gas, or is Gazprom just making another power play to seize someone else’s assets?

I would go for the latter theory in a heartbeat accept for the fact that Rosneft is owned by the Russian government and Videsh is owned by India(who is generally considered an important Russian ally, though one wonders if this still holds true). So Gazprom’s proposal is going to make India and China mad as well as hurt a company owned by the Russian government. That seems like a lot of trouble to cause for the production of just one gas field.

Maybe Russia really is running short on gas.