China visit of Mr. Putin

[Starschy + 211]

Besides the Olympic there seems to come a big Gas contract. President Putin and Xi are very good Friends.

I‘m not quite sure if the Mongolian pipeline is ready for Signature. All pre contract work for the Russian side is finished.

Tass reported that only a very small Delegation is allowed - 6 Persons. 

Update

Russia signed with China a second 30 years Gas contract with China. 10 Billion m3. Payment in Euro. Call it a Non Dollar trade.

The Mongolia pipeline is not officially signed but the volume is huge a 50 Billion m3 pipeline.

A large Airplane contract was signed too.

Edited February 4, 2022 by Starschy
addendum

[Andrei Moutchkine + 828]

6 hours ago, Starschy said:

Besides the Olympic there seems to come a big Gas contract. President Putin and Xi are very good Friends.

I‘m not quite sure if the Mongolian pipeline is ready for Signature. All pre contract work for the Russian side is finished.

Tass reported that only a very small Delegation is allowed - 6 Persons. 

I've seen reports that Mongols are already on to building their part.

[Tomasz + 1,608]

Gazprom, which is responsible for two-thirds of Russian natural gas supplies, produced 35 billion cubic meters in 2021. less energy than its production capacity allows, according to its own data. And this despite record high prices in Europe and strong demand on the domestic market, according to the report of the International Energy Agency (IEA) on the situation on the gas market in the first quarter of 2022.
Earlier, Gazprom reported that last year it produced almost 515 billion m3 of natural gas (62 billion m3 more than in the previous year). The head of the company, Alexei Miller, called this result the best in 13 years.
According to the IEA report, the agency's experts believe that Gazprom can produce approx. 550 billion cubic meters. natural gas annually.
This number is the same as Miller announced in June 2018. In April last year, vice president of the management board of the company Vitaly Markelov stated that its annual potential "exceeds 500 billion cubic meters".
Earlier, on January 12, the head of the IEA Fatih Birol accused Russia of worsening the difficult situation on the European energy market, claiming that Russian exports could increase by at least a third, or 3 billion cubic meters. monthly.
The Russian side has repeatedly rejected these accusations, both at the level of the country's top management and Gazprom's top management.
WHAT FOR?
Dmitry Koptew, an expert of the Institute for the Development of Comprehensive Fuel and Energy Technologies (IRTTEK), recalls that in December analysts noted that Gazprom is clearly working at the limit of its capabilities and is unlikely to be able to further increase production at the same pace without impressive capital investments . - Therefore, it is likely that this year it will not be able to significantly increase gas supplies to Europe - the specialist believes. Not only because of the growing obligations to China via the Power of Siberia gas pipeline, he adds.
The potential of Gazprom to increase supplies to Europe is slightly different according to Maria Belova, research director at Vygon Consulting. "In the short term, as Vladimir Putin noted in October, the Russian exporter is ready to talk about increasing supplies," he recalls. The expert also believes that it would still be beneficial for Gazprom to have additional supplies via Nord Stream 2, which is still waiting for the completion of the certification procedure.
On the other hand, the question arises - does Gazprom have to increase European supplies? - convinces Koptev. - As both company representatives and European politicians have repeatedly stated, the Russian supplier is consistently fully meeting its contractual obligations. Moreover, Gazprom is ready to deliver more if requests arise.
"At the same time, gas prices in Europe remain high even after the arrival of tankers with American LNG," said an IRTTEK representative. "Today they again exceed $ 900 per 1,000 cubic meters."
Under such conditions, a sharp increase in supplies, which will lead to lower prices, is simply unprofitable for the Russian exporter, the expert concludes.
“It is better to deliver the contracted quantities at a high price than to collapse the market and end up with lower revenues,” he concludes.
WHERE IS THE INVESTMENT?
"In the mid-2000s, the development of the Shtokman field was considered," recalls Maria Belova, research director at Vygon Consulting. As a result, Gazprom also lost interest in this project. In turn, the Europeans understood it in such a way that the Russian state holding does not have the opportunity to invest in large projects - says the specialist.
It should be noted that the IEA also points to a steady decline in investment in natural gas exploration and production worldwide since the beginning of the last decade, noting in its report that even theoretically, this factor threatens to achieve global carbon neutrality by 2050.
Gas supplies from Gazprom to Europe depend on three factors, says Sergei Kapitonov, a gas analyst at the Energy Center of the Moscow School of Management of Skolkovo.
- These are the company's production capabilities, the demand for pipeline gas from Russia from European consumers and the company's marketing strategy - he emphasizes.
The expert believes that before the launch of the Kharasaveyskoye field in Jamala in 2023, no natural increase in production from Gazprom should be expected. "However, it is possible to use the existing power reserves, which, according to the company's management, amount to tens of billions of cubic meters," explains the specialist. long-term contracts from consumers in Europe.

THE SOLUTION IS
Konstantin Simonov, director general of the National Energy Security Fund (FNEB), also points to the importance of long-term contracts for Gazprom. Notes that Europeans could easily overcome fears of losing some of the Urengoy volumes related to the planned construction of Power of Siberia 2. "It is clear that we are talking about a second gas contract with the Chinese, which will probably be discussed during Vladimir Putin's upcoming trip. to China in February "- convinces the expert. "But the Europeans themselves say that the spot model is more promising than the contract. And accordingly, Gazprom is also thinking about alternative markets for its volumes, in case they do not find their consumer in Europe.
The specialist is skeptical about the position of European consumers. Should Gazprom invest in new deposits at its own risk? Asks Simonov. - Sign new long-term contracts and you'll be fine. Where the Russian supplier will get the gas from is his problem. And the Europeans make it clear that they don't want to pay for credibility. " In this regard, the Russian state holding company drew attention to China, the head of the FNEB states.
"By the way, there are also plans to connect the Yamal Peninsula with the Power of Siberia-2, which Gazprom has never hidden," says the expert. "The plans are ambitious, but they exist."
Middle East countries will not be able to fully compensate for gas supplies to Europe if Brussels refuses Russian fuel. This was reported by publishers Bloomberg, Anna Shiryaevskaya and Isis Almeida.
They explained that the energy-rich nations from Azerbaijan to Qatar pledged to provide the European Union with the necessary raw materials urgently, but quickly realized that they simply could not replace the leading exporter, Moscow.
"Europe has no alternative to Russian gas. You will have to redirect half of the LNG consumed by Asia to meet Gazprom's level of supply," said Ron Smith, senior analyst at BCS Global Markets.
In his opinion, this will lead to a huge shortage of fuels and the spread of the energy crisis throughout the Asian continent.