Gazprom Exports to EU Hit Record

[Marina Schwarz + 1,576]

Gazprom exported 190 billion cu m of gas to Europe this year, which is apparently a record. What I don't understand is how they step up the rhetoric but keep buying the gas. There are alternatives, after all, so break the chains, Europe.

[Kate Turlington + 44]

and, today Forbes came out with a story about the real war between Washington and Moscow not being over Ukraine, but over Europe as a whole, with news that Russia will allow Gazprom to sell LNG at any price in order to 'counter' the US.

[Seleskya + 50]

yep. payback time. Russia's livid about the Polish 5-year LNG deal with the US ...

[Carlsbad + 19]

My understanding is that this is an actual regulation--a decree allowing Gazprom to sell LNG at any price. Before now, Gazprom could only sell gas at a regulated rate to local LNG producers. So they're not selling LNG, they're selling gas to LNG producers to make them more competitive against the US--to under cut the competition. 

 

 

[Seleskya + 50]

Even more ... Gazprom is planning to throw almost $14 billion (yes, billion) into pipeline routes to Europe and China in 2018 alone. As a state-run company, they're going to throw everything they have at this, and will win. 

[Marina Schwarz + 1,576]

14 hours ago, Seleskya said:

yep. payback time. Russia's livid about the Polish 5-year LNG deal with the US ...

Doubt it. Poland compared to Germany and even more to China is, well, a tiny market. But I like the Poles' position: they are being consistent unlike the UK, accusing Russia of everything but buying their gas all the same. 

[Tomasz + 1,608]

Gazprom gas has a price in 2015-2017 about 4-6 $ per brittish termal unit- simple rational decision by european countries to buy cheapest and objectively in historical perspective rather cheap gas. So Europen gas consumption  rose for the first time in a decade

 A cost of production on russian fields is about 1 $ per MMbtu or even less - only Iran has such low cost fields.

[SLL + 24]

On ‎12‎/‎28‎/‎2017 at 8:12 PM, Seleskya said:

Even more ... Gazprom is planning to throw almost $14 billion (yes, billion) into pipeline routes to Europe and China in 2018 alone. As a state-run company, they're going to throw everything they have at this, and will win. 

$14 billion sounds like a big number, but it doesn't get you much as far as pipe is concerned.  A Permian to near-Texas Gulf Coast will cost you $2B, and that run is only 450 odd miles.  With good infrastructure (roads, etc) enabling access, etc.

[Rodent + 1,424]

I thought Merky was not in favor of this pipeline deal, since it cut out the Ukraine? I honestly can't keep up with Gazprom's saga with Europe/Ukraine/US. 

[Tomasz + 1,608]

2 hours ago, Rodent said:

I thought Merky was not in favor of this pipeline deal, since it cut out the Ukraine? I honestly can't keep up with Gazprom's saga with Europe/Ukraine/US. 

Absolutely no way. Germany is simple biggest beneficiary of Nord Stream II - they will become gas hub for all of Europe and will have keys to european gas system. Simple one more powerful tool of political domination over  Europe. And of course cheaper gas for german industry so they really want it.

[Marina Schwarz + 1,576]

Tante Angela is very much pro-Nord Stream 2. Germany is shutting down its nuclear power plants as well as coal plants but it needs huge amounts of energy and wind and solar just can't cut it, so more gas is the only way. She's pragmatic, that one. Except when it comes to immigration, that is.

[Tomasz + 1,608]

50 minutes ago, Marina Schwarz said:

Tante Angela is very much pro-Nord Stream 2. Germany is shutting down its nuclear power plants as well as coal plants but it needs huge amounts of energy and wind and solar just can't cut it, so more gas is the only way. She's pragmatic, that one. Except when it comes to immigration, that is.

Yes I agree with you. Germany also need to compesate a high labour cost in their industry in comparison with other countries with cheap raw materials- especially gas.

Edited May 17, 2018 by Tomasz

[sudhir + 9]

Hate it or love it , Europe does need Gazprom. I am not an advocate of Russia or Gazprom , but clearly there is a US-Europe lobby trying to keep Gazprom at bay (but at what cost ?). At any chilly day, when a German or French or Polish (or any European) needs gas , who do you think is closest to them ? US (takes days to ship gas from there) , Middle East ( still faraway) , Gazprom (yes , right at your door and at a lower cost).

Edited June 17, 2018 by sudhir

[TomTom + 183]

Who would've thought that Gazprom could become the ideal dividend stock!

[DanilKa + 443]

On ‎12‎/‎29‎/‎2017 at 12:12 PM, Seleskya said:

Even more ... Gazprom is planning to throw almost $14 billion (yes, billion) into pipeline routes to Europe and China in 2018 alone. As a state-run company, they're going to throw everything they have at this, and will win. 

if you know anything about Gazprom or Russia - pipeline is either not needed or cost 1/10th of what they spend on it...

[Jan van Eck + 7,558]

You folks are overlooking the international marine shipping sector.  A huge amount of LNG tonnage has been ordered and will hit the water in 2019,  There is also QAatar as a major LNG exporter, and Libya is down there on the Southern European flank with a ton of gas (albeit politically unstable) and so is Algeria with its gas fields.  Can Europe operate without Russia?  Sure it can. Does it want to?  Only the countries of the former Soviet Bloc, those who lived under the heel of Stalin and are horrified at the prospect of another experience of a generation of oppression.  For the rest, specifically Germany and England, they seem oblivious to that risk.  

I predict LNG gas will be exported in large quantities to new terminals in both the Baltic and the Black Seas.  You will see Odessa become an import hub, together with the fore-port to Stettin. And US gas will be coming in, because the customers are out there.  Can Russia hold them back? Remembering that the current big pipelines run one through Belarus  (another dictatorship that will be on deck as a Putin location for some time still) and another through Ukraine (which is effectively getting shut down, if not already).  Russia need the routes through Turkey into the South of Europe, and the undersea Black Sea Route to the Western side of Istanbul, but that takes time.  Russia also need the second NordStream route, and that takes even more time. Can dumped gas through NordStream I hold off the Americans?  Probably not., 

I really don't think that Russia can afford to continue to give gas away.  Historically they have priced to market, charging whatever the market can bear. To try to hold off the competition by dropping price into the cellar is a losing strategy, as Russia seriously needs the income. Russia is a society with serious internal problems, and although Moscow can force the Russian people to continue to suffer, and live in privation, at some point even the fabled Russian ability to endure punishment and deprivation will run out.  It was exactly that scene that collapsed the old Soviet Union;  Ronald Reagan simply outspent them. 

[Tom Kirkman + 8,860]

10 hours ago, Jan van Eck said:

Russia need the routes through Turkey into the South of Europe, and the undersea Black Sea Route to the Western side of Istanbul, but that takes time. 

 

[Tomasz + 1,608]

I think Europe must get used to situation  of more than 200 bilions meters of Gazprom gas on european market in next couple of years because  its just best source of energy if you dont like coal anymore.

[Marina Schwarz + 1,576]

I think they already are, it's all a show, saving face.

[Guillaume Albasini + 851]

It's good to have several suppliers (Russia, Allgeria, Libya,, Qatar, US...). More competition means lower prices for the european consumers.

But Russia will remain the main suppliers for long, at least until Europe starts producing own .green gas using the excess solar and wind capacity.

Gas demand will increase as Europe get rid of coal and nuclear energy then renewables will start to bite the gas market share.

[Tom Kirkman + 8,860]

22 minutes ago, Guillaume Albasini said:

It's good to have several suppliers (Russia, Allgeria, Libya,, Qatar, US...). More competition means lower prices for the european consumers.

But Russia will remain the main suppliers for long, at least until Europe starts producing own .green gas using the excess solar and wind capacity.

Gas demand will increase as Europe get rid of coal and nuclear energy then renewables will start to bite the gas market share.

Generally agreed on all 3 paragraphs, Guillaume.  Except for a minor quibble that I don't see EU producing excess solar and wind energy any time soon.

[Guillaume Albasini + 851]

15 minutes ago, Tom Kirkman said:

Generally agreed on all 3 paragraphs, Guillaume.  Except for a minor quibble that I don't see EU producing excess solar and wind energy any time soon.

Maybe later than soon but it will happen.

European energy companies are working on power to gas projects to produce green methane or hydrogen from renewables. It can also be seen as a way to store huge amounts of energy when batteries are not enough.

http://www.europeanpowertogas.com/demonstrations

 

[HermitMunster + 146]

On 6/20/2018 at 8:33 AM, Jan van Eck said:

You folks are overlooking the international marine shipping sector.  A huge amount of LNG tonnage has been ordered and will hit the water in 2019,  There is also QAatar as a major LNG exporter, and Libya is down there on the Southern European flank with a ton of gas (albeit politically unstable) and so is Algeria with its gas fields.  Can Europe operate without Russia?  Sure it can. Does it want to?  Only the countries of the former Soviet Bloc, those who lived under the heel of Stalin and are horrified at the prospect of another experience of a generation of oppression.  For the rest, specifically Germany and England, they seem oblivious to that risk.  

I predict LNG gas will be exported in large quantities to new terminals in both the Baltic and the Black Seas.  You will see Odessa become an import hub, together with the fore-port to Stettin. And US gas will be coming in, because the customers are out there.  Can Russia hold them back? Remembering that the current big pipelines run one through Belarus  (another dictatorship that will be on deck as a Putin location for some time still) and another through Ukraine (which is effectively getting shut down, if not already).  Russia need the routes through Turkey into the South of Europe, and the undersea Black Sea Route to the Western side of Istanbul, but that takes time.  Russia also need the second NordStream route, and that takes even more time. Can dumped gas through NordStream I hold off the Americans?  Probably not., 

I really don't think that Russia can afford to continue to give gas away.  Historically they have priced to market, charging whatever the market can bear. To try to hold off the competition by dropping price into the cellar is a losing strategy, as Russia seriously needs the income. Russia is a society with serious internal problems, and although Moscow can force the Russian people to continue to suffer, and live in privation, at some point even the fabled Russian ability to endure punishment and deprivation will run out.  It was exactly that scene that collapsed the old Soviet Union;  Ronald Reagan simply outspent them. 

Reagan and Saudi Arabia colluded to tank the price of oil which is what led to the fall of the S.U. There will be no Russian collapse this time.

[HermitMunster + 146]

On 12/28/2017 at 5:56 PM, Seleskya said:

yep. payback time. Russia's livid about the Polish 5-year LNG deal with the US ...

 

No they aren't. They responded by saying Gazprom could sell LNG at any price.

[HermitMunster + 146]

Two good reads from Oxford Institute regarding Europe and Gazprom:

https://www.oxfordenergy.org/wpcms/wp-content/uploads/2016/01/Gazprom-Is-2016-the-Year-for-a-Change-of-Pricing-Strategy-in-Europe.pdf

https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/03/Gazprom-in-Europe-–-two-Anni-Mirabiles-but-can-it-continue-Insight-29.pdf

Another good article:

http://energypost.eu/a-grand-bargain-with-gazprom/

 

I don't personally believe U.S. LNG will ever be a threat to Russia pipeline gas to Europe.