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Natural gas futures fell by more than 3% early Tuesday after Russia said it signed a major agreement for a natural gas pipeline with China that will more closely tie the two countries’ energy industries together.

Russia’s state-owned Gazprom announced Tuesday morning in comments from top executive Alexei Miller that the corporation, among the largest energy players in Russia, signed a legally binding agreement with Beijing to build the long-delayed Power of Siberia 2 pipeline, which will move natural gas from the Siberian region of Russia to northern China via Mongolia.

Beijing has not yet confirmed details of the announcement.

Power of Sibera 2 is projected to allow Gazprom to ship as much as 50 billion cubic meters of gas annually for 30 years, Miller said, according to Bloomberg.

The project has long been eyed by Russian president Vladimir Putin as a key step toward backfilling funds that once came from Europe before the continent drastically reduced its purchases of Russian gas in the wake of its invasion of Ukraine.

Russia accounted for 45% of Europe’s gas imports in 2021; today, it accounts for just 18%, according to Reuters.

Prior to Russia’s invasion, Europe had been buying as much as 150 billion cubic meters per year of Russian gas. The EU is currently considering moves that would ban Russian gas from short-term contracts starting in June 2026 at the latest, and ban shipments under existing long-term deals by the end of 2027.

It is unclear how much China would pay for the gas pumped in via the new pipeline, but it will be a lower price than what Europe pays, Miller said.

The fall in gas prices adds to a drop of more than 26% since the start of the year as a combination of weak demand and quickly increasing stores have pushed prices consistently downward.