Europe gas market -how it started how its going

[Tomasz + 1,608]

USA is currently buying nearly 1 milion barrels of oil and oil products from Russia per day.

Its Ural heavy oil  and heavy semi-refined products because you put sanctions on other big producers of heavy oil like Venezuela and Iran.

Im not an expert but Anas Alhadji and Art Berman said so many times that in US shale you dont have a problem with oil quantinty but with oil quality. 

You have light sweet shale oil and it becames lighter (API) with every single passing year.

So you need with every passing year of oil US shale oil development MORE AND MORE heavy oil to blend light sweet with heavy oil like russian Ural oil especially to produce some oil products like diesel economically in refineries.

Im sorry for you but thats sad reality of US shale oil.

US oil independence is a pipe dream because you have big problems with oil quality of too light oil (API).

We have for last couple of years increasing structural deficit of heavy oil like Ural.

Good for Russia just look on oil differentials in last decade after sanctions on Iran and Venezuela.

Edited January 11, 2022 by Tomasz

[Tomasz + 1,608]

Everyone strives to offend the pipe Yuri Barsukov on the unkind attitude of the German Foreign Minister towards Nord Stream 2

https://www.kommersant.ru/doc/5129023

The announcement of the new German Foreign Minister Annalena Berbock that the Nord Stream 2 gas pipeline cannot yet be launched, since the German regulator suspended its certification due to “non-compliance with the requirements of European energy legislation,” caused some confusion not only in the public field. but also among market participants. Gas prices in Europe soared by 10%, exceeding $ 1.3 thousand per 1,000 cubic meters. Obviously, some of the traders took the words of the German minister, firstly, for a certain new position, which, secondly, reflects the opinion of the German government, which recently took office.

Indeed, Annalena Berbock's statements stand in stark contrast to those of the previous government, Angela Merkel, who were traditionally neutral or even sympathetic towards Nord Stream 2. And as the leader of the Green faction in parliament, Ms. Berbock sharply criticized the project. Now journalists are trying at every opportunity to catch her on contradictions, which, apparently, caused such an incautious statement. But, in essence, the minister did not say anything new: the certification of Nord Stream 2 was suspended a month ago due to bureaucratic formalities. Regarding compliance with legal requirements, the German regulator has yet to make a decision on this issue.

But we must also admit that there is uncertainty around Nord Stream 2. In the past, Germany and Russia entered into an informal deal in which Germany helped Gazprom build a gas pipeline to get rid of transit dependence on Ukraine, and Russia agreed to continue this transit, albeit on a smaller scale. Both sides tried to fulfill these obligations honestly. But because of US sanctions, the construction of the pipeline was delayed, and the guarantor of the deal from Germany, Angela Merkel, resigned as chancellor before Nord Stream 2 went live. The question now is whether the government of Olaf Scholz can actually reaffirm its commitment to the spirit of that agreement and ensure that the pipeline is put into operation. I'm pretty sure it will.

If this does not happen, the consequences, in my opinion, are quite obvious - in 2024 the contract for transit through Ukraine will not be extended, and the Germans will have to choose whether to receive gas through the already built Nord Stream 2 or not to receive it at all. As we can see this year, Europe's dependence on Russian gas has not diminished in the least. And it's hard for me to imagine that any German politician would prefer to deprive his voters of heat and electricity for the sake of abstract obligations to a third country.

[Tomasz + 1,608]

Gazprom is unlucky with the weather The thaw brought down gas supplies to Europe in January

A sharp warming in Europe during the New Year holidays crippled the supply of Russian gas in the first week of January. Pumping through Ukraine has almost halved, through the Turkish Stream - by a third, and through the Yamal-Europe gas pipeline remained zero. Gazprom's European customers, expecting a warm winter, minimize their current purchases and use the stored gas.

Gazprom almost halved gas supplies to Europe via Ukraine in the first nine days of January. So, according to the Slovak gas transmission operator Eustream, the average daily volume of supplies on January 1-9 fell to 54 million cubic meters, which is 55% less than in the previous ten days of December 2021.

Although gas consumption in Europe traditionally declines in early January due to a decrease in industrial activity during the holidays, last year in the same period supplies through Ukraine were about 50% higher.

Gazprom currently sells gas to Europe only under long-term contracts. The volume of supplies for them depends not on Gazprom, but on its customers - it is they who determine how much gas (within the framework of contractual restrictions) they intend to withdraw on each next day. Gazprom could increase supplies to Europe outside the framework of long-term contracts (for example, by selling gas on its electronic trading platform), but prefers not to do so.

In addition to the Ukrainian route, Gazprom supplies gas to Europe through three more gas pipelines: Nord Stream, Turkish Stream and Yamal-Europe. Deliveries via Turkish Stream, according to the Bulgarian gas transmission operator, decreased on average over the period under review by 37%, to 25.4 million cubic meters per day. Considering that Gazprom has not been using the Yamal-Europe gas pipeline at all for almost a month due to the lack of customer applications, the total volume of Russian gas supplies to Europe (excluding Turkey) fell in the first ten days of January to a minimum of at least the last ten years ... Deliveries via Nord Stream continued almost unchanged.

According to Kommersant's interlocutors in the gas market, the main reason for such a sharp drop in Russian gas supplies is warm weather.

In the last days of December and early January, the air temperature in Central and Western Europe set several records: for example, in Berlin and Paris on December 31, the day was almost 12 ° С, in Vienna - 16 ° С. The warming wave began to decline only at the end of last week. As a result, despite the decline in purchases from Russia, European consumers were able to dramatically reduce the rise of gas from storage: according to AGSI +, from December 30 to January 2, reserves in European underground storage facilities even increased, as injection exceeded production. However, the current level of inventories has already dropped below 54%.

How Gazprom's exports are growing in China

Although warm weather led to a correction in gas prices at the end of December to almost $ 800 per thousand cubic meters from a maximum of $ 2,000 reached on December 21, prices began to rise again in the new year. This is partly due to the normalization of weather conditions, partly - the rise in oil prices. Trading in February futures on the TTF index on the ICE stock exchange closed on December 7 at around $ 989 per thousand cubic meters (€ 83.4 per 1 MW • h).

The Weather Company currently expects January and March in Europe this year to be slightly warmer than multiyear average this year, with February warmer in northern Europe and colder in southern Europe. If this projection turns out to be correct, the best strategy for Gazprom's European clients may be to minimize current purchases in order to make it through the warmer months on stocks in storage facilities purchased at much lower prices than current ones.

Yuri Barsukov

https://www.kommersant.ru/doc/5156475

[Starschy + 211]

.. please delete

Edited January 12, 2022 by Starschy

[Starschy + 211]

A smaller impact have those German Gas buys from Netherland almost 7 Bio m3 which is close to the equivalent for Poland alone.

 

Baerbock is not relevant for Northstream 2, all decision for Russia will be managed by Chancellor Scholz the same as under Madame Merkel. 

[Boat + 1,315]

1 hour ago, Andrei Moutchkine said:

Au contraire. It is absolutely critical. The Russian crude you buy is the heavy variety which you need to replace Venezuelan crude you used before. US domestic fracking produces extra light and sweet crude,which also fetches a premium price. You need heavier crude to make diesel for heavy machinery and (to lesser extent) aviation kerosene. So, you sanctioned yourself into a corner yet again.

Russia supported Syria. It did not support Iran, or at least not unequivocally so. We have a history of mutual distrust going way way back to since before there was US. So, Mr. Numerical, can you actually back up your claim of Obama increasing actual troop presence? Trump sorta did, but not really, by having a lot of spare hardware like tanks park in Poland. How do you know what the Russians call you? From CNN or MSNBC? Up until a couple of weeks ago, were all Russian official sources always following the diplomatic protocols to the letter. (Something you could well learn, BTW) Putin still does. He always refers to his opponents as "our esteemed Western/American partners" It is safe to say that you are fighting a Russian strawman created by your media rather than real Russia. Same is likely true for China and North Korea.  Do you need an leads to proper Russian propaganda or you can help yourself?

Having to fight the Ukrainians would be very unfortunate, as it would effectively mean fighting our own. The rest of European decoys of yours fool no-one.. The bulk of NATO's military power (or lack thereof) is provided by US. The rest are mostly there because they think they are going to win. Actually, take a look at military history of Romania or Bulgaria. They have quite a history of picking the wrong side for that very reason.

So far, is oil demand only growing, while the supply is dwindling due to being past peak. Are you suggesting that the age of plastics is over? Or the age of synthetic fertilizer? Any and all heating appliance is to become electrically powered by renewable electricity?

Even if you stop burning oil for transportation fuel altogether, you will only save a fraction thereof

https://www.eia.gov/energyexplained/use-of-energy/transportation.php

https://www.eia.gov/energyexplained/oil-and-petroleum-products/use-of-oil.php

You tell me what that means, but probably nobody is as wasteful as the US. I don't see an electric replacement for aircraft or shipping anytime soon. US haven't even bothered with electrifying its railroads yet. That is, you depend on diesel locomotives for bulk of your coast-to-coast freight.

Who is a Russian Gardner? What is FF we are supposedly messing with? USA ain't too shabby at gardening either. For most of its history, Russia wasn't. Too crappy a climate.

So the ability of technology and the desire to retard the use of FF products that pollutes our land, air and sea has little impact in your world. I say your an idiot. Lol Think and explain away. Ihave no time for nonsense.

You know nothing about US oil either. There is some trade between N American countries but the continent as well as the US is net energy independent. Look up what net means. Several million in petroleum products are exported every day but the same amount over time is imported. The US having better brains and better refineries make it popular for refining and redistribution. Canada imports roughly 4 mbpd and the rest of the world imports small amounts. But Russias 20,000 is but a small dark spot of wet in comparison. 
Your bringing in this foreign ignorant bs. Did your election get stolen? You sound semi Republican.

[Andrei Moutchkine + 828]

1 hour ago, Boat said:

So the ability of technology and the desire to retard the use of FF products that pollutes our land, air and sea has little impact in your world. I say your an idiot. Lol Think and explain away. Ihave no time for nonsense.

You know nothing about US oil either. There is some trade between N American countries but the continent as well as the US is net energy independent. Look up what net means. Several million in petroleum products are exported every day but the same amount over time is imported. The US having better brains and better refineries make it popular for refining and redistribution. Canada imports roughly 4 mbpd and the rest of the world imports small amounts. But Russias 20,000 is but a small dark spot of wet in comparison. 
Your bringing in this foreign ignorant bs. Did your election get stolen? You sound semi Republican.

Ah, Fossil Fuels. A dubious concept. Because a) Most uses for oil do not involve burning it b) Care to explain oceans of LNG on Titan? How did the dead dinosaurs get there? Incidentally, US happens to be the largest oil producer worldwide, even if it is for internal use. So, you stand to lose even more revenue than us, or what?

I obviously know more about oil than you do, US or not. Though I never claimed to be an expert on such. I know, perhaps a picture could help against the ignorant persisting in their ignorance? Somebody has to do it.

 

		This source says that the heaviest fraction used by (American?) gasoline is C11H24 (a paraffin with 11 carbons) https://auto.howstuffworks.com/fuel-efficiency/alternative-fuels/question105.htm
		This is the definition of light crude http://www.petroleum.co.uk/light-oil both of the WTI and Brent benchmarks you see all over are light crude. That is, you can realistically expect it to barely scratch at the lowest end of what you need to make kerosene, the next heaviest fraction, having 12 to 16 carbs.
		Thus, is you concept of all-important net completely irrelevant. Due to oil not actually being a commodity that is arbitrarily substitutable for other oil, OK? So, you may even be exporting more oil than you export, but it changes nothing much. You are still not self-sufficient because you need some amount of heavier crude for your tanks and your aircrafts. Otherwise, all you've got is technicals (pickup trucks and SUVs) If yes, we are talking about an elaborate petrochemical synthesis plant, not a refinery (which is merely a very large fractional still, conceptually) Speaking of which, you also depend on Russia for most of your palladium catalysts. The bulk of North American heavier crude used to come from Venezuela. Now, that you are trying to overthrow their government, it obviously doesn't and you are sanctioning yourself in a foot yet again. Sanctioning everybody in sight ain't very healthy, you know. Now, go ahead, also sanction Russian crude which you allegedly don't need anyway and see what happens then. I am Russian. According to your lore, we don't have elections anyway. I do think that Trumps election got stolen. Never seen as much ballot stuffing in my life, even in Ukraine. This happens to be an impartial opinion of mine, as I find rooting for Tweedledee over Tweedledum entirely pointless. The unprovoked hostility to Russia seems a bipartisan thing. There is also absolutely no influence that the public opinion has over US foreign policy, regardless who you a voter for. Demonstrated time and again.Random research sample: https://www.grin.com/document/184886 Rather, they manufacturer your public opinion as needed. And you will dutifully gobble it up, for like the 20th time? Does not seem very smart. The allegedly best US brains also have imported wholesale. As college students or ready-made professionals. US educational system seems to produce complete dolts at the level of high school. This is a workable overview on how your politics works That is, there are two token issues that are thrown to the plebs to provide an illusion of choice, abortion and guns (noticeably both non-issues elsewhere, regardless of the extent they allow abortions and/or guns) An even simpler view is that your politicians are for sale. They officially work for whoever bribes them most. (In US, entirely legal, if you rename bribery with polite "lobbyism") One thing is certain - it sure as fuck is not you. You haven't got enough money for "lobbyism". In Russia, there is some similarity to you system. See https://en.wikipedia.org/wiki/Bald–hairy That is, some leadership characters are bold and some are hairy. The two alternate as reliably as your Republican and Democrats. You can think of the bold ones as advocating a more African-like development model (aka Upper Volta with nukes, eventually Wakanda) and hairy ones as advocating Eurasian integration model ass-backwards to everybody else on the continent (aka Aseopa, which rhymes with zhopa, Russian for ass) See, this is already more political diversity than you've got. Your approach is always quite African one. Where the exact little copy of US is well known. It is Liberia, quite likely the most terrifying shithole of all, with no redeeming values whatsoever. This what happens when you try to make an exact copy of US on African money. Will Liberia ever become Wakanda? Even got trials by "Federal Grand Jury" (possibly, a secret tribunal with no possibility of defense) As medieval as your are, how cute is that? (this artifact of British common law got removed a few hundred of years ago elsewhere) You do know that common law means law for commoners? For those who actually have rights in UK, there is https://en.wikipedia.org/wiki/Equity_(law) You've also got that, but forgot to make it official. There is also the https://en.wikipedia.org/wiki/Royal_prerogative Means the royals can actually do whatever the fuck they see fit. AFAIK, only the JFK had that in US. Ended as badly for him as for royals back in the old country when they tried to invoke it.

[Tomasz + 1,608]

 

Quote

 

"Gazprom" can increase supplies to Europe by at least a third, but does not do this, said the head of the International Energy Agency (IEA) Fatih Birol. In his opinion, this creates tension in the European energy market.

“Although we understand that Gazprom is fulfilling its contractual obligations under long-term contracts, it has reduced spot sales to Europe, and this despite the fact that prices under Gazprom’s long-term contracts are well below current spot price levels,” Mr. Birol told reporters. (quote from Bloomberg ). “There is a lot of tension in the European gas market due to Russia’s behavior.”

According to the head of the IEA, Russia can increase gas supplies to the continent by at least a third.

In December, gas prices began to rise against the backdrop of Gazprom's refusal to reserve the capacity of the Yamal-Europe gas pipeline. Bloomberg sources said that the company's decision is due to the exhaustion of limits, due to which buyers need to pay for them at the prevailing market price. At the end of the month, the price of gas in Europe exceeded $2,150, which was a record. Around the same time, Gazprom announced

 

I wonder why Russia would definitely prefer to send more gas to China, and it is making a determined effort to do so.

And so it comes to my mind that China probably does not impose any sanctions on Russia and the West does it.

And sanctions work as far as I know in both directions and may hit a boomerang if the situation changes.

[Tomasz + 1,608]

NOVATEK to increase LNG sales to China The company signed contracts for the supply of 1.6 million tons per year

NOVATEK will supply ENN LNG (Singapore) Pte. Ltd. (a subsidiary of the Chinese ENN Natural Gas Co.) about 0.6 million tons of LNG per year from the Arctic LNG-2 project, the Russian company said today. The term of the contract is 11 years. The LNG will be delivered on a DES (ship-in-port) basis to the ENN LNG terminal in Zhoushan, China.

In June 2021, NOVATEK and trader Glencore agreed to supply more than 0.5 million tons of LNG per year to terminals in East Asia. The company also announced a 15-year contract with the Chinese Shenergy Group for a total volume of 3 million tons on DES terms with an oil peg.

NOVATEK plans to distribute its sales portfolio from Arctic LNG-2 in such a way that 80% will be in Asia and 20% in Europe.

In the European market, NOVATEK still has a firm contract only with the Spanish Repsol for 1 million tons per year for 15 years. The company also has a memorandum with Vitol on the possible sale of up to 1 million tons per year on FOB terms in Murmansk.

The capacity of Arctic LNG-2 will be 19.8 million tons per year, of which 10% each will be contracted for long-term by four partners of NOVATEK - Total, CNPC and CNOOC and the consortium Mitsui and JOGMEC.

Thus, NOVATEK itself must sell 11.9 million tons from its portfolio. In addition to these contracts, NOVATEK has said it wants to sell up to 2 million tons of LNG per year in China through a joint venture with Sinopec. The company also expects to win a tender in Vietnam for the supply of LNG for the needs of new power plants with a volume of up to 4 million tons per year. The company can sell the remaining volumes of Arctic LNG-2 on the spot.

https://www.kommersant.ru/doc/5157444

[Tomasz + 1,608]

Yuri Barsukov on why he likes the new EU regulation

https://www.kommersant.ru/doc/5156786

While citizens in Russia sliced olive oil and opened champagne on December 31, European Commission officials hurried to finalize the draft of a new regulation that should determine which sources of electricity in the EU will be considered green and will receive the right to continue life. The document was sent to European capitals a few hours before the New Year, but attempts to mask the cardinal differences between EU members behind the festive hype failed: the draft was immediately leaked to several major European business media and caused a scandal.

The essence of the problem is that in this "taxonomy" nuclear power plants and natural gas were classified as green energy sources. The latter, however, with reservations: it will be possible to build traditional gas-fired power plants only until 2030 and only if they replace the even dirtier coal generation that is being phased out. After this period, only ultra-clean gas-fired thermal power plants with emissions below 100 grams of CO2 per kWh are allowed to be built: in practice, this most likely means the need to switch to gas-hydrogen mixtures or partial CO2 storage. Nevertheless, even such a concession to common sense provoked the wrath of European environmentalists.

More important for the fate of the document are the contradictions between France, where 70% of the generation comes from nuclear power plants and which has managed to legalize nuclear energy as green for the coming decades, and Germany, which is about to close its last nuclear power plants. Following German insistence, expert consultations on the project, which were supposed to end on January 12, were extended for another week.

The final version, which must be approved by the EU countries by the middle of the year, may undergo a number of changes. But it is encouraging to see that the European Commission has at least partly taken into account the lessons of the current energy crisis that Europe is going through. It seems that the role of gas as a fuel that can balance the unstable operation of the energy system with a large share of renewable sources will be preserved for a long time. And yet, for countries that do not want to be too dependent on fluctuations in gas prices, there is the possibility of building a nuclear power plant (Poland is a classic example).

Clear rules of the game would remove at least some of the uncertainty for Russian gas companies - and Gazprom in particular. The fact that the European Commission has officially recognized the need to build new gas-fired thermal power plants will allow European customers to enter into long-term gas purchase agreements without too much fear of immediate obstruction. The overall infrastructure of the gas market will also be preserved, and as long as this is the case, Russian gas will be able to find a place for itself in the European energy mix.

[Tomasz + 1,608]

Gazprom goes for polymers The company can buy 50% in the Rusgazdobycha project in the Baltic

https://www.kommersant.ru/doc/5157071

"Gazprom" can get 50% in the capital of the future complex for the production of polymers in Ust-Luga, which was previously going to be handled solely by "Rusgazdobycha" Artem Obolensky. Negotiations on a possible deal are taking place against the background of the organization of project financing for a plant worth about 1.5 trillion rubles. Kommersant's sources in the market suggest that Gazprom's participation in the capital is necessary in order to increase creditors' confidence in the future of the project.

The Federal Antimonopoly Service granted Gazprom's request to acquire a 50% stake in the authorized capital of Baltic Chemical Complex LLC (BHC), the service said on January 10. We are talking about the project of the Rusgazdobycha gas chemical plant for the production of basic polymers with a capacity of 3 million tons of polyethylene and polypropylene per year, which is planned to be built in Ust-Luga. At the moment, 100% of BHC is owned by Rusgazdobycha, controlled by Artem Obolensky, former partner of Arkady Rotenberg in SMP Bank.

The plant was originally planned as part of a single technological complex for the processing of ethane-containing (wet) gas from Gazprom's fields in Western Siberia.

The first technological part of the complex should be a gas liquefaction and ethane recovery plant, which is owned by Gazprom and Rusgazdobycha through the Ruskhimallyans joint venture. This plant, consuming 45 billion cubic meters of wet gas per year, should produce, respectively, 13 million tons of liquefied natural gas, 18 billion cubic meters of commercial gas, up to 4 million tons of ethane and 2.2 million tons of liquefied hydrocarbon gases (LPG) per year. Ethane and LPG will then be processed into polymers. The launch of the first stage of the integrated complex is currently scheduled for the end of 2024, the second - for 2025.

The parties did not disclose the details of the deal. Rusgazdobycha said it was discussing with Gazprom its acquisition of a stake in BHC, adding that "a number of details are currently being agreed." Gazprom declined to comment.

The cost of BHC is unknown. The head of Rusgazdobycha, Konstantin Makhov, said that the total cost of the integrated project is about 3 trillion rubles, of which half is for gas processing, and the other for gas chemistry. The main EPC contracts for the construction of both gas processing and gas chemical plants have already been signed, but their amounts were not disclosed. So far, the project is financed by state banks. Thus, VEB.RF will allocate loans for the entire integrated project with a total limit of 745 billion rubles. Gazprombank also provided a bridge loan for 45 billion rubles to the project. and guarantees to contractors for 170 billion rubles. Konstantin Makhov did not rule out that the project in Ust-Luga could receive funding from the National Welfare Fund. And the financial director of Gazprom, Famil Sadygov, said that in 2022 the company expects to attract project financing for the plant in Ust-Luga.

Gazprom may increase the capacity of the LNG plant in Ust-Luga by a third

Analysts are traditionally reluctant to officially comment on the Ust-Luga project, given the paucity of data on its cost and economic model. According to one of Kommersant's interlocutors in the industry, Gazprom's entry into the BHC may be a forced measure related to the need to organize project financing: banks may not be sure that Rusgazdobycha is capable of independently coping with such a large project. In addition, the participation of "Gazprom" in the capital will certainly reduce the cost of attracting financing.

Also, Kommersant's interlocutors suggest that possible foreign buyers of GCC products could insist on Gazprom's participation in the company as a guarantor of the supply of raw materials and marketing of products.

For Gazprom, this may be the first new own asset in the petrochemical industry (besides Gazprom Neftekhim Salavat, which the company has historically inherited). Previously, the company had mixed experience in this segment: the Novy Urengoy GCC project remained unrealized. As for the Amur GCC, which is supposed to process ethane from Gazprom's Amur GPP, SIBUR is involved in its construction.

[Tomasz + 1,608]

Gazprom renews contract for gas supplies to Turkey The agreement was signed only with Botas

Gazprom has signed a new contract with the state company Botas to supply gas to Turkey for another four years. Instead of contracts for 8 billion cubic meters per year, where half was for Botas and half for private Turkish importers, an agreement was signed for 5.75 billion cubic meters per year with Botas alone. This formalized Turkey's departure from the previous course of liberalizing its gas market, which has been facing problems for a number of years.

Gazprom Export announced the signing of a new contract for the supply of gas to Turkey with the local state-owned company Botas. “Gazprom Export and its main partner in Turkey, Botas, signed a package of agreements on December 30, 2021 regarding cooperation in the field of gas supplies and the use of gas transmission infrastructure,” the Russian company said on January 6. The new contract for the supply of gas, which replaced the old agreement of 1998 with a volume of 4 billion cubic meters per year, was concluded for four years with an annual volume of 5.75 billion cubic meters. We are talking about supplies to western Turkey via the Turkish Stream gas pipeline.

Thus, as Kommersant expected, Botas took over part of the volumes of private Turkish importers, whose contracts for a total of 4 billion cubic meters per year also expired on January 1, 2022.

We are talking about contracts Avrasya Gaz (0.5 billion cubic meters), Shell (0.25 billion cubic meters), Bosphorus Gaz (0.75 billion cubic meters) and Enerco (2.5 billion cubic meters), concluded in 2009 during the so-called first gas release. As part of this procedure, Botas transferred its original contract volumes to private companies, since at that time the Turkish government was about to liberalize its gas market along the European lines.

The reform, however, began to falter as the lira continued to depreciate against the dollar in the second half of the 2010s: private importers were constantly plagued by scissors between dollar-denominated import contracts and domestic regulated gas tariffs. Botas was less vulnerable because it also transports gas and has other income to cover recurring losses from gas sales on the domestic market.

Currency market conjuncture hinders new contracts between Gazprom and Turkey

As a result, in 2014–2017, Gazprom provided various discounts to private importers, which, however, still did not allow most of them to maintain financial stability. According to Kommersant's estimates, in 2019 alone, private importers did not pay Gazprom about $1.7 billion under take-or-pay terms, and the Russian company still cannot receive this money, although it won the relevant international arbitrations.

Therefore, according to Kommersant, Gazprom offered to transfer all volumes under expiring contracts back to Botas.

As a result, a compromise solution was reached - out of 4 billion cubic meters of annual volumes of private importers, Botas took over about 2 billion cubic meters. The total contract portfolio of Gazprom in the Turkish market has decreased to 30 billion cubic meters.

The parties did not disclose the price terms of the contract. The previous contract was based on an oil peg, which helped Turkey a lot in 2021, when spot gas prices in Europe and the cost of spot LNG shipments in the world market increased several times.

https://www.kommersant.ru/doc/5156016

[Tomasz + 1,608]

Analysts reveal why Beijing is going after Russian gas

China is striving to diversify its energy supplies amid growing tensions with Australia

 

Energy-hungry China is reportedly looking to boost its purchases of natural gas from Russia due to the ongoing trade row with Canberra, which may put at risk deliveries from Australia, China’s number one gas supplier.

China, the world’s largest natural gas consumer, heavily relies on energy imports. In 2020, the country purchased 43% of its gas requirements from abroad, including 89 billion cubic meters of liquified natural gas (LNG) and 46 billion cubic meters of pipeline gas, according to data revealed by the General Administration of Customs. 

The trade data compiled by Refinitiv shows that Australia was China’s biggest supplier of gas in the first nine months of last year, followed by the US, another country whose relations with Beijing have been in steady decline in recent years.

A second supply channel with Russia “will partly meet China’s rising demand and also help diversify its imports,” according to Tian Miao, a senior analyst with Everbright Sun Hung Kai, as quoted by SCMP.

Trade and diplomatic tensions between China and Australia have been increasing for several years, especially after Canberra banned Chinese vendors from its 5G rollout. The situation worsened when Australia backed a US call for an international probe into Beijing’s alleged role in the Covid-19 outbreak.

As a result, Beijing has slapped high tariffs on Australian wine, while China’s purchases of Australian coal reportedly dropped by an enormous 89.7% from January-November 2021. The Australian government has retaliated by killing two deals under China’s Belt and Road Initiative between the state of Victoria and China.

Russian natural gas is currently being sent from Far-Eastern Yakutia to China through the Gazprom-operated Power of Siberia pipeline, which first became operational in December 2019. Meanwhile, the projected Power of Siberia 2 gas pipeline is expected to pump 50 billion cubic meters of gas annually to northern China.

“Just as it makes sense for the EU to use [liquefied natural gas] as a political hedge… it makes sense for China to use Russian pipeline gas as a political hedge or backup for its high reliance on LNG – large amounts of which come from Australia and the United States, with whom Beijing’s relations have deteriorated over the past years,” said Henning Gloystein, director of energy, climate and resources at Eurasia Group, as quoted by SCMP.

So far, the ongoing dispute between Canberra and Beijing has not extended to LNG or iron ore. However, Australia received no new long-term supply contract from China in 2021, according to data tracked by market intelligence provider OilChem.net, which also disclosed that some of its market share had been eroded by Qatar, Russia and the US.

[Andrew Neopalimy + 14]

2 hours ago, Tomasz said:

Analysts reveal why Beijing is going after Russian gas

... В настоящее время российский природный газ направляется из Дальневосточной Якутии в Китай по эксплуатируемому «Газпромом» газопроводу «Сила Сибири», который впервые был введен в эксплуатацию в декабре 2019 года. Между тем, ожидается, что по проектируемому газопроводу «Сила Сибири-2» будет прокачиваться 50 млрд кубометров газа. газа ежегодно в северный Китай. ...

To clarify, for forum readers:
"Power of Siberia" - 38" billion m3 of gas per year;
"Sila-Siberia - 2" - 50 billion m3 of gas per year;
"Power of Siberia - 3" - 38 billion m3 of gas per year.
Total, excluding LNG: 126 billion m3 of gas per year.

At the opening of the Olympics, they will sign, as well as the Agreement on the Unified Monetary System of the Russian Federation-PRC (on the unification of the national payment systems SPFS-CIPS or SPFS-CUP), which, after the inclusion of India, will become the financial settlement system of the BRICS countries - BRICS Pay.
SPFS+CIPS (or SPFS+CUP) = BRICS Pay

REFERENCE.
Since 2014, Russia has had an analogue of SWIFT - SPFS (Financial Message Transfer System) of the Bank of Russia was originally conceived as an alternative channel for interbank interaction in case the country is disconnected from SWIFT. Now SPFS accounts for about 20% of the total number of financial transactions within the Russian Federation. And NSPK "Mir" is an analogue of Visa and Mastercard payment systems.
China has had its own national payment system, China UnionPay (CUP) and China International Payments System (CIPS) since 2002, plus the digital yuan....

[Tomasz + 1,608]

As one of Gazprom shareholder Im confused and worried about certification, because without Nord Stream 2 my Gazprom dividend will yield this year about 13%. 

But unfortunately I also heat my house with gas and so I wonder if I start burning with coal or wood  or just to buy even more shares for dividend

It would be easier for me to make a final decision - wouldn't it be possible and desired to give me  some small discount for NG burned for heating as truly faithful shareholder even when the share was scrubbing at the bottom?

When the main narrative was even  lower for even longer?

I was patient and 13% alone do not satisfy me because after all, I do not have much of these shares.

On the other hand, I would like to sign a direct gas contract with Gazprom, even in the take or pay formula.

 

Edited January 13, 2022 by Tomasz

[Tomasz + 1,608]

Q3: Gazprom had spare capacity to fill its storage. It didn't, perhaps for political reasons but it had no such requirement and   didn't even notice it allowing policymakers to sleepwalk into crisis. We call for changes.

Q4: Gazprom produced 136 bcm or 1,48bcm/d.

As we know that:

1/previous quarterly record was 118 bcm in Q3 21 and

2/Gazprom’s max capacity is 1.5 bcm/y, we can safely assume that Gazprom had no spare capacity in Q4.

Western politicians assumed for years that Gazprom will always be holding enough spare capacity for free to balance any unexpected events.  This means that Gazprom is to bear all the costs of maintaining the infrastructure and the EU will buy gas on the spot market only as it suits her, and if not, let Gazprom find some money to not get bankrupt.

 We are currently seeing the effects of such policy in hard way.

[dukeNukem + 80]

7 hours ago, Tomasz said:

 

I wonder why Russia would definitely prefer to send more gas to China, and it is making a determined effort to do so.

And so it comes to my mind that China probably does not impose any sanctions on Russia and the West does it.

And sanctions work as far as I know in both directions and may hit a boomerang if the situation changes.

I don't think West will impose any serious sanctions on Russia...especially Europe, it is just win-win for both parties in terms of oil-gas trade since USSR times.

Probably Russia is going to send more gas to China (and Asia in general), because strategically this is point of grow. EU gas consumption stagnating, but Asia growing fast. Most of oil and gas demand is coming from this part of the World... 

 

[dukeNukem + 80]

7 hours ago, Tomasz said:

Analysts reveal why Beijing is going after Russian gas

China is striving to diversify its energy supplies amid growing tensions with Australia

 

Energy-hungry China is reportedly looking to boost its purchases of natural gas from Russia due to the ongoing trade row with Canberra, which may put at risk deliveries from Australia, China’s number one gas supplier.

China, the world’s largest natural gas consumer, heavily relies on energy imports. In 2020, the country purchased 43% of its gas requirements from abroad, including 89 billion cubic meters of liquified natural gas (LNG) and 46 billion cubic meters of pipeline gas, according to data revealed by the General Administration of Customs. 

The trade data compiled by Refinitiv shows that Australia was China’s biggest supplier of gas in the first nine months of last year, followed by the US, another country whose relations with Beijing have been in steady decline in recent years.

A second supply channel with Russia “will partly meet China’s rising demand and also help diversify its imports,” according to Tian Miao, a senior analyst with Everbright Sun Hung Kai, as quoted by SCMP.

Trade and diplomatic tensions between China and Australia have been increasing for several years, especially after Canberra banned Chinese vendors from its 5G rollout. The situation worsened when Australia backed a US call for an international probe into Beijing’s alleged role in the Covid-19 outbreak.

As a result, Beijing has slapped high tariffs on Australian wine, while China’s purchases of Australian coal reportedly dropped by an enormous 89.7% from January-November 2021. The Australian government has retaliated by killing two deals under China’s Belt and Road Initiative between the state of Victoria and China.

Russian natural gas is currently being sent from Far-Eastern Yakutia to China through the Gazprom-operated Power of Siberia pipeline, which first became operational in December 2019. Meanwhile, the projected Power of Siberia 2 gas pipeline is expected to pump 50 billion cubic meters of gas annually to northern China.

“Just as it makes sense for the EU to use [liquefied natural gas] as a political hedge… it makes sense for China to use Russian pipeline gas as a political hedge or backup for its high reliance on LNG – large amounts of which come from Australia and the United States, with whom Beijing’s relations have deteriorated over the past years,” said Henning Gloystein, director of energy, climate and resources at Eurasia Group, as quoted by SCMP.

So far, the ongoing dispute between Canberra and Beijing has not extended to LNG or iron ore. However, Australia received no new long-term supply contract from China in 2021, according to data tracked by market intelligence provider OilChem.net, which also disclosed that some of its market share had been eroded by Qatar, Russia and the US.

It might be also due to security reasons for China - if any military confrontation starts, it is pretty easy to block all (or most) LNG ships to China.

Plus Clear Sky policy - natural gas share in energy mix must go up significantly. 

[Tomasz + 1,608]

It is interesting that the Americans for years threatened with serious sanctions on the Russian oil and gas sector because, unlike Europe, they do not consume Russian hydrocarbons in such quantities.

This  topic has fallen off the list - inflation readings seem to have a calming effect on the Washington hawks.

[dukeNukem + 80]

2 minutes ago, Tomasz said:

It is interesting that the Americans for years threatened with serious sanctions on the Russian oil and gas sector because, unlike Europe, they do not consume Russian hydrocarbons in such quantities.

This  topic has fallen off the list - inflation readings seem to have a calming effect on the Washington hawks.

I would recommend to read this article written by senator Rand Paul  

https://www.theamericanconservative.com/articles/nord-stream-sanctions-are-not-about-security/

 

Quote

Over the past decade Congress and presidents have heaped sanctions on Russia and China. When I’ve asked State Department officials to reveal what behavioral changes have come about as a result of sanctions, I’ve gotten only blank stares. Now the sanctionistas want to sanction an already completed pipeline. But what behavior are they asking Russia to change? What specifically is Russia being asked? What Russian action is necessary for the sanctions to end?

If Nord Stream II sanctions were really about changing Russian policy or deterring aggression, then NATO, including Germany, could threaten sanctions if Russia invades Ukraine. Now that threat of sanctions, with Germany as an ally, might actually have deterring value.

But as today’s debate unfolds, I think you’ll find that sanctions against Nord Stream II are more about mercantilism and protectionism than national security.

 

[Boat + 1,315]

1 hour ago, dukeNukem said:

I would recommend to read this article written by senator Rand Paul  

https://www.theamericanconservative.com/articles/nord-stream-sanctions-are-not-about-security/

 

 

So when Russia sells missile systems your asking for behavior change? No when Russia sells weapon systems to bad actors like Iran Russia itself then gets missiles on its door step. See how that works? When Russia interferes in US elections they receive bear traps near the border for the clever little bear. You may figure this out someday. Then again you probably won’t. Let’s hear more about the weak old man who’s attention you want so badly. 

[Boat + 1,315]

At least for a couple decades there will be a robust nat gas market. Russia who makes 1/2 a trillion per year on nat gas is so dumb they pollute their own market. Like Iran and  Venezuela do with their oil. This is no group of sages. 

[Tomasz + 1,608]

Long-term LNG contracts are getting expensive amid fears of a supply shortage  

There’s a lack of uncontracted gas available through 2025, says WoodMac

Recent long-term LNG deals getting done at high-12% Brent.

Last year's deals were at low-10%

 

LET ME EXPLAIN- RUSSIAN army is in Russia. On russian teritory.

BUT you Americans in Ukraine are just a few thousand kilometers from the nearest  American borders.

On the other hand, when asked what is more likely Ukraine in NATO or World War III, the logical sequence is that these phenomena are just as probable.

Simply dragging Ukraine  even more to the West means a great armed conflict in Europe.

The world was already dealing with such conflict called the Cuban crisis of 1961.

In the world of such expensive commodities, Russia will not make a step back as there is nowhere to go back.

And two why should she withdraw if the situation is now rather going according to her thoughts and there are going to be rather very large profits from the production of commodities?

In such a world a western hooting and Western sanctions is much less terrible than when raw materials were relatively cheap

Worst sanctions- sanctions on foreign debt

2 problems

Russia is one of least indebted countries less than even Saudi Arabia. Also has rather huge currency reserves.

And also rather big profits from commodities

You can of course sanction russian debt but for the time being Russia doesnt need this money.

[Tomasz + 1,608]

https://www.money.pl/gospodarka/pgnig-pod-rzadowa-kroplowka-dostanie-miliardy-by-nie-zbankrutowac-6725620109069280a.html

Quote

 

Quote

PGNiG under a governmental drip. He will get billions not to go bankrupt

 PGNiG may receive over PLN 20bn in aid from the government. The provisions of the gas bill are intended to help the giant during the energy crisis in Europe. The Ministry of State Assets says straightforwardly: we cannot bring down a large enterprise which is important for the country's energy security. Experts are wondering what the European Commission will say about such provisions.

The government took up changes to the gas law on Tuesday. Ultimately, they are intended to moderate the increase in prices on world markets for households and companies in Poland. The energy crisis related to the increase in the prices of this raw material is a problem faced by the entire European Union. And while the assumptions regarding the fight against high prices are quite clear and repeatedly raised by the government of the United Right, certain regulations contained in the draft referring directly (though not directly) to PGNiG may seem puzzling.

The government is preparing a massive cash injection for PGNiG
The bill provides for assistance in the form of a multi-billion dollar stream of money between the state and PGNiG. According to the assumptions, it is to be directed in two ways. Firstly, the Government of Strategic Reserves (formerly the Material Reserves Agency) may buy gas from PGNiG (the act does not mention the state-owned company directly, but the provisions are unambiguous). The agency will have about PLN 6 billion for this purpose in 2022 - informs the portal Wysokienapiecie.pl
The second injection will be in the form of compensation related to the freezing of gas prices, which is to guarantee the maintenance of lower prices for retail customers. All gas supply companies can benefit from these solutions.
However, PGNiG will also receive loan guarantees under the COVID-19 Counteracting Fund. This is a government gift exclusively for PGNiG.
As part of the guarantee, PGNiG may receive up to PLN 20bn in a loan, calculates Wysokienapiecie.pl, which can be used, for example, for the purchase of LNG gas. A loan and bonds for this purpose are also to be guaranteed by the State Treasury.

Unauthorized state aid for PGNiG?
The provisions on state aid may raise concerns as to their compliance with EU regulations, because if, in the case of compensation for freezing gas prices, other entities may use them, then the lending and provisions regarding the Material Reserves Agency, according to experts, are to be written in such a way that are aimed exclusively at the Polish gas giant.
- With these assumptions and such a bill, it is clear that PGNiG has no money. Article 2 of the Act, although it is not explicitly stated that it is about PGNiG, shows that the state-owned company will sell gas for about PLN 6 billion to the Material Reserves Agency, and the provision in Article 3 gives PLN 20 billion from the covid fund - explains the manager and former president of PGNiG Grażyna Piotrowska-Oliwa.

These records were clearly written under PGNiG. This may mean that the company has huge financial problems that require state aid that is not allowed in the EU - he adds.
According to Jakub Wiech, an energy expert and deputy editor-in-chief of Defence24, such regulations are a logical step in the current situation, when prices on the gas market are still far from normal, and in the background we have a global policy in which Russia treats gas as one of the tools to exerting influence on EU countries.

- The provisions of the draft act that were discussed are quite clearly aimed at supporting PGNiG. I think these regulations are the need of the moment. Taking into account the situation on the gas market, what the current gas prices are and what the tariffs set by the Energy Regulatory Office require, the support also directed to PGNiG is something that is necessary and needed. The question is how will it be perceived by the European Commission, which must be informed about the new regulations. We will see how Brussels reacts to this. Certainly, these solutions will facilitate the operational activities of PGNiG in these critical months, when gas is still expensive and there is no option to relieve the market, explains Wiech.

The devil is in the details as always
We asked an EU law expert and former deputy foreign minister, Artur Nowak-Far, whether these provisions could be questioned by Brussels. The lawyer is of the opinion that the situation on the gas market is unusual, and that the gas itself is crucial for the economy, therefore everything will depend on specific analyzes of the amount of support.

- You have to check whether it is indeed a refund and does not include any price premium. This should be subject to control and notification to the European Commission. The same applies to sales to the Material Reserves Agency. It all really depends on the price at which gas is purchased from PGNiG. We cannot prejudge anything, if all the rigors are kept, we cannot speak of unauthorized state aid - explains Artur Nowak-Far in an interview with money.pl.

We asked about the draft act, the Ministry of State Assets. MAP spokesman Karol Manys did not want to comment on specific provisions, because it is still a project, but he referred to PGNiG itself and the situation on the gas market.

 

20 bilion zlotys is 5 bilion dolars

[Starschy + 211]

Russia is sending more Gas to China anyway.

Power of Sibiria will work with full capacity in 2025.

And the Mongolian link will be built till around 2027.