Russian Oil and Gas Industry: News #3

So the main issue for NS 2 is action of US sanctions preventing any insurance of the pipeline. So it does not make
sense to complete the construction if the project cannot be activated. To the trolls, cancellation of this project
is not some baby tantrum and Russia weak BS. It is up to the EU-tard users of the gas to sort out their shit.

NATzO is expecting Russia to continue supplying gas via Pukeraine. Here is where the real test for Putin's government
lies. Time to stop feeding Nazis who butcher civilians with their shelling of Donbass residential areas.

Hole wrote:Is there a state-owned insurance company in Russia? If yes then this should be no problem. If no then it is time to start one.

It is a never ending game of move the goal posts. The EU will not certify such a company so the problem will remain.

kvs wrote:

Hole wrote:Is there a state-owned insurance company in Russia? If yes then this should be no problem. If no then it is time to start one.

It is a never ending game of move the goal posts.   The EU will not certify such a company so the problem will remain.

It is common for companies to self insure if they have the assets to back the risk. Gazprom is probably large enough, and the Russian State definitely so, to do that.

MOSCOW, January 26. /TASS/. The price of the Russian oil export blend Urals in Europe is above $55 a barrel for the first time since last February on the back of expected contraction in Russian and Saudi oil deliveries, S&P Global Platts told TASS.

Urals oil prices were above $50 per barrel in mid-December 2020 and climbed to more than $55 a barrel on January 12, with a minor decrease to $54.75 a barrel in Northwestern Europe CIF Rotterdam by January 25. Urals was traded in the Mediterranean (CIF Augusta) at $54.9 a barrel on January 25.
Read also
Urals oil price above $50/bbl, traded with discount vs. Brent — S&P Global Platts

"Urals differentials versus the forward Dated Brent benchmark are attempting to stage a recovery from the slump observed at the end of 2020, despite the recent upward trend in crude flat prices. The full provisional February loading program across Primorsk, Ust-Luga and Novorossiysk shows shipments will be 4.3 million metric tons in total across the month, 1.74 million metric tons lower than in January," says Iain Stevenson, Managing Editor, Crude Oil, EMEA.

"A reduced stream from Russia, combined with Saudi production cuts which could see European buyers lose a significant proportion of their monthly allocations, means that the market is trading around some considerable pressure from the supply side. In the context of a short sour crude environment in Europe, Urals continues to perform," Stevenson added.

Early in January, Saudi Arabia made a decision to further reduce oil production by 1 mln barrel daily in February - March 2021. Russia and Kazakhstan were provided with an opportunity to ramp up production of oil by 150,000 barrels per day within these two months.

JohninMK wrote:

kvs wrote:

Hole wrote:Is there a state-owned insurance company in Russia? If yes then this should be no problem. If no then it is time to start one.

It is a never ending game of move the goal posts.   The EU will not certify such a company so the problem will remain.

It is common for companies to self insure if they have the assets to back the risk. Gazprom is probably large enough, and the Russian State definitely so, to do that.

Correct.

Plus Germany has this planned out to skirt the US sanctions anyway:

JohninMK wrote:
Germany has achieved progress in negotiations with the US concerning the Nord Stream 2 pipeline, which Washington wants to prevent from being completed, and expects talks on the issue to be held soon, the head of the German Bundestag Committee on Economic Affairs and Energy, Klaus Ernst, said. Ernst noted, however, that one topic will be off-limits in these talks – the sovereignty of Germany and the European Union.

"I hail the fact that the US now wants to exempt European governments and their bodies from [Nord Stream 2] sanctions. These talks are bound to happen. [...] Now [Germany's] federal government has to unambiguously indicate during these talks that the sovereignty of Germany and the EU are not up for discussion", Ernst said.

The German lawmaker also praised the "creative ideas" of the country's federal states, which may allow private companies to dodge the American sanctions against the pipeline. Ernst referred to a recent report by the newspaper Bild, claiming that Mecklenburg-Western Pomerania's authorities are mulling creating a climate protection foundation that will designate Nord Stream 2 as a crucial piece to protect the environment in the German state and will allow private companies to provide their services to the pipeline indirectly. Mecklenburg-Western Pomerania's officials refused to comment on the report.
New Nord Stream 2 Sanctions Negotiated in US Congress

An apparent breakthrough in talks between the US and the EU regarding the joint megaproject, funded by Russia's Gazprom and several European energy giants, comes after the US Congress reached a compromise on the annual National Defence Authorisation Act (NDAA), which among other things contains provisions for sanctions against Nord Stream 2.

According to the document, any companies that facilitate the construction of the pipeline, for example, by providing it with pipe-laying vessels will be targeted with US sanctions. Government entities, however, will no longer fall into the eligible category, thus allowing them to certify the pipeline for operation. Previously, Norwegian-German certification company Det Norske Veritas – Germanischer Lloyd said it would cease working on certifying vessels involved in the project, but denied stopping the inspections of the pipeline itself.

https://sputniknews.com/europe/202012041081359821-sovereignty-of-germany-eu-not-up-for-discussion-in-talks-with-us-on-nord-stream-2-lawmaker-says/

The Fortuna vessel resumed work on the construction of the Nord Stream 2 gas pipeline

The next reports come from the water area of ​​the Nord Stream-2 gas pipeline. The reports indicate that the pipe-laying vessel Fortuna has resumed work on the construction of a gas pipeline in Danish Baltic waters. Representatives of the company carrying out the work cycle noted that such work "is being carried out in full accordance with all the approvals received."

Earlier it became known that "Fortuna" came under another batch of US sanctions. Also, two companies participating in the project decided to urgently abandon the project for fear of facing the same American sanctions.

It got to the point that during a meeting between Gazprom CEO Alexei Miller and President Vladimir Putin, the head of state instructed to consider the possibility of a complete cessation of the SP-2 project. It was noted that construction could be stopped completely due to the changing policy of European partners, who themselves cannot decide on an unequivocal answer whether they need the Nord Stream 2 gas pipeline or not.

In view of the fact that Fortuna has resumed work, it can be assumed that the European partners have assured the Russian side that they are interested in the implementation of the project. At the same time, this position is not officially announced at the moment.

Let us remind you that earlier it was reported about plans to complete the construction of "SP-2" this summer.

NOTE: wonder if there is a security force on board to prevent seizure from "third parties"?

Self insurance is not enough. That is a smug retort and I would rather believe the cited expert. It really is not that
easy. Compare to any self-insurance of a contractor you hire. They could be using some fly by night insurance company
that will leave you with nothing. So Gazprom can't just declare that it can self-insure and have the EU treat that as
if it is all the same.

The claim about "common to self-insure" leaves out the show-stopper regulatory detail and is thus so much hot air.

Perhaps Russia needs to get to the heart of the issue and link US sanctions and actions to sabotage NS II with their deal with the Ukraine.

If NSII is stopped then the contract with the Ukraine is cancelled and gas stops flowing through the Ukraine to Europe.

Or just start producing LNG and shipping it to the countries that want to buy it...

Now that's what I call a big red, white and blue pussy!

https://www.handelsblatt.com/politik/deutschland/transatlantischer-konflikt-nord-stream-2-usa-stellen-deutschland-bedingungen-fuer-sanktionserlass/26872184.html

US Signals Readiness To Discuss Lifting Of Nord Stream 2 Sanctions

The stalled dispute over Nord Stream 2 is moving: For the first time, the USA is signaling that it is ready to talk about an end to the US sanctions against the controversial Baltic Sea pipeline from Russia to Germany. The Americans, however, expect the German side to move too and submit a proposal.

"The Germans have to put a package solution on the table," a US official involved in the talks told Handelsblatt. "Otherwise we will not be able to get the issue of Nord Stream 2 out of the way" - a clear sign that Washington wants to resolve the conflict over the gas pipeline. The US wants to prevent Europe's dependence on Russian natural gas from growing further and Ukraine from being decoupled from the European gas infrastructure.

Rahr pointed out three points signaling the negotiations between Germany and the USA "SP-2"

The new President of the United States of America, Joe Biden, agrees to ease the pressure on Nord Stream 2 and is ready to negotiate with Germany on the terms of its completion.

This opinion was expressed by German political analyst Alexander Rahr, commenting on the publication of the Handelsblatt publication, which, referring to US officials, said that Washington began negotiations with Berlin to lift the sanctions imposed on Nord Stream 2 if the German governments fulfill a number of conditions.

In particular, the German newspaper reports that the United States is waiting for a package offer from Germany, which, among other things, will spell out the possibility of blocking the project if Russia starts to put pressure on Ukraine by reducing gas transit through its territory. The United States also believes that new negotiations are needed on the continuation of Russian gas supplies through the Ukrainian gas transportation system.

According to Alexander Rahr, quoted by Vesti.FM, this means that Joe Biden does not want to conflict with Germany over the completion of the Russian gas pipeline and is ready to make concessions.

First, Rahr emphasized, Biden initially stated that he was planning to restore transatlantic relations, and he did not want to start rapprochement with Europe by unleashing a trade war with Germany.

“The second point is the American demands to diversify gas purchases from Russia, so that Europe does not depend only on Russia, have been fulfilled,” the political scientist recalled.

Germany, he said, made every effort to get Russia to agree to continue using the Ukrainian gas transportation system for gas transit to Europe.

Russia has already signed all the necessary contracts with Ukraine and gas flows will continue to flow through its territory. True, these contracts are temporary and will be implemented only if Ukraine modernizes its GTS, which is in a deplorable state, Rahr said.

“The third point is that Germany said that it would build the very terminals for receiving American liquefied gas at its own expense. The only thing that Germany, of course, cannot agree to: it cannot artificially buy liquefied American gas cheaper than Russian gas. The market should decide here, ”the political scientist added.

Earlier in the German press, information appeared that both the German Foreign Ministry and German Chancellor Angela Merkel are ready to discuss these issues with the new American administration, since under the previous US President Donald Trump, Washington did not go to dialogue on this topic at all.

At present, the Russian gas pipeline Nord Stream 2, which will directly connect Russia and Germany along the bottom of the Baltic Sea, is 94% complete. It remains for the builders to lay pipes in the Danish waters of the Baltic Sea and in a small section of German territorial waters.

Read IA "Politics Today" in Yandex.news
Author: Alexander Lublinsky

EU-tards are clearly slaves on the US plantation. All their yapping at Russia and they can't even make a simple choice about who
they buy natural gas from. So they will pay for Qatari LNG with a heavy markup not just for liquefaction but to pay Uncle Swine-shit
tribute. Moron is as moron does.

kvs wrote:Self insurance is not enough.   That is a smug retort and I would rather believe the cited expert.   It really is not that
easy.  Compare to any self-insurance of a contractor you hire.   They could be using some fly by night insurance company
that will leave you with nothing.   So Gazprom can't just declare that it can self-insure and have the EU treat that as
if it is all the same.  

The claim about "common to self-insure" leaves out the show-stopper regulatory detail and is thus so much hot air.

In the event of there being a problem that finds a company like Gazprom liable to pay money it is Gazprom on the hook to pay. Just like you and I if we smash up our cars. In both situations the risk can be subcontracted out.

Whereas you and I have no option but to do so and take out insurance cover a company, or indeed country, often finds it a whole lot easier to do so but it does not have to. If they have the resources they can carry that risk themselves. All they have to do is convince the other party to the contract that they do have the assets to back it up. In some cases part insurance is possible, it all depends on the scale of the risk and the cost, whilst in others the risk may be so high that the insurance companies can't see a profit so won't insure. Some companies even set up their own insurance subsidiaries.

As you say, using a fly by night insurance company just to have an insurance company in the paperwork seldom cuts the mustard. By the way, self insurance is fairly common in business, especially in health cover. We self insured our goods in transit cover.

As to regulatory details, this is bureaucrats seeking the easy way out, they don't need to do much to tick the box when it is Lloyds or Veritas, there is more work when alternatives have to be adopted, in this case by neither of those organisations being willing due to sanctions, the project having to continue.

Hole wrote:Norway supplies nearly as much gas to the EU as Russia. So much to the dependancy.
.............
Before we build terminals for LNG the muricans should finish there own and show that they can deliver LNG. Talking is cheap (unless you are Barack Obongo and receive a few hundred thousend bucks for a speech).

Not so now that the UK is out of the EU.

It looks increasingly likely that the US will not have much excess gas to export. As you point out they need terminals and some big gas tankers.

The whole situation is a last minute 'how do we stop Russia making more money' by the US without thinking it through.

Anyone else noticed that both pipe layers are, according to their trackers, currently in port.

Biden has said he wants to restore the good relations between the US and EU, well why would Germany consider US demands in a contract that has nothing to do with them.

Clearly the US wants Russian gas to continue to flow though the Ukraine, so the first thing Russia needs to do is stop all gas flow through the Ukraine and block up the pipes so they can't be used.

Germany can then either hurriedly complete the NSII to get the gas they need, or they can go short.

If the Ukraine then offers Russia a better deal then perhaps they might consider it... or maybe not... they don't have a great track record...

GarryB wrote:
Clearly the US wants Russian gas to continue to flow though the Ukraine, so the first thing Russia needs to do is stop all gas flow through the Ukraine and block up the pipes so they can't be used.

Unfortunately they can't cut gas flow through Ukraine just like that, they already signed agreement in December 2019 to keep those pipelines operating till 2024.

https://www.euractiv.com/section/energy/news/russia-and-ukraine-finalise-gas-deal-just-ahead-of-new-year-deadline/

It is expected that Gazprom will transit at least 65 billion cubic meters of natural gas via Ukraine next year, then at least 40 billion per year from 2021 to 2024, said Zelensky, earning Kyiv “more than seven billion dollars”.

And I like how Zelensky brags about how much they will make. Not like they didn't make that before. The Ukraine really fucked up.

Yeah, Kiev never got any commitments from Gazprom about the volume of shipments.   Kiev would never have been able to
get such a clause in the contract anyway.

I will repeat: Russia needs to transition to LNG exports.   Then sell to the highest bidder.   For example, we saw LNG prices jump
to over $1000 per thousand cubic meters this winter in the far east.    But contracted pipeline supplies are sold for around $200
per tcm and are tied to the unrelated oil price.    Gazprom is pissing away a precious resource.   I will call this to be one
of Putin's fails.   EU-tards are giving Russia a wonderful pretext to move to LNG, but Russia is trying to finish NS 2.   Give them
fuckers what they want and they will rue the day and soon.

kvs wrote:Yeah, Kiev never got any commitments from Gazprom about the volume of shipments.   Kiev would never have been able to
get such a clause in the contract anyway.

I will repeat: Russia needs to transition to LNG exports.   Then sell to the highest bidder.   For example, we saw LNG prices jump
to over $1000 per thousand cubic meters this winter in the far east.    But contracted pipeline supplies are sold for around $200
per tcm and are tied to the unrelated oil price.    Gazprom is pissing away a precious resource.   I will call this to be one
of Putin's fails.   EU-tards are giving Russia a wonderful pretext to move to LNG, but Russia is trying to finish NS 2.   Give them
fuckers what they want and they will rue the day and soon.

Russia is building tankers and expanding LNG infrastructure like there is no tomorrow, still decades of investment are needed to substitute the pipelines. And those can be very useful in the future and are the tool to secure that market, since not even Western fraudsters can fuck up the market enough to defeat Russian pipe gas with their LNG. The pieces are falling into place, no worries here.

Russia should build more plants like that in Amur to reproduce natural gas in different products. It is better to sell products from gas than gas itself and made even more money. Amur plant will reproduce 40 billion m³ of gas per year.

Gazprom Records Highest-Ever January Natgas Sales To Europe Amid Deep Chill

Meanwhile Greta ThunAsperger or was it ThunAutism, is whining on Twitter that NS-2 needs to be stopped to be in solidarity for far-right Nazi Mr.NoseCoke Navalny. Imagine crippling your nations economic future for a little twat with Down Syndrome lol!

Unfortunately they can't cut gas flow through Ukraine just like that, they already signed agreement in December 2019 to keep those pipelines operating till 2024.

They also signed agreements with Germany over the NSII pipeline and nothing is happening...

I still think completing the pipeline to Kaliningrad and just delivering LNG to the EU makes the most sense for Russia.

France backed out of the Mistral deal, Siemens stopped providing gas turbine blades to Russian power stations... there are plenty of previous examples for Russia to follow...

Russia not delivering on NS2 would be grave mistake. They would be abrogating their agreements with JV partners in the Eurostani energy companies that have invested in the projects. These companies are allies in this regard, and Russia should stick by those who have cast their lot in with them. Pulling out will not only impose the obligation of compensation onto Russias shoulders, it will also adversely impact the reputation they are trying to build as a fair partner in honest partnerships.

Russia sticking to her guns and delivering on her legal contractural obligations is having soft-power payoff as non-aligned nations see Russia facing off against Murican and Eurotrash corruption and (so far) they are winning. Sticking it to the feckless Murican deep state criminals is a worthy goal, and depriving Banderite Ukropistan of transit fees is iceing on the cake. Nations like China watch the unfolding drama and are quietly cheering Russia on.

NS2 is more than just a gas pipeline. It is a battle of wills and soft-power between a free soverign Russia and a declining corrupt oligarchic US hegemon. Russia simply must win. The forces of Evil need a publically-delivered bloody nose.

Spot on.

Others might break their contracts, that's up to them, but its clear that Russia, before and no doubt after Putin, believes that its word is its bond. As it used to be in old fashioned face to face business.

In this way Russia might be alone in the World but its a good place to be. In business I never broke my word and often went beyond it.

As long as those pipes in Ukraine don't fall apart then, apart perhaps from war in Donbas or other contract fail, that gas will flow until the end of the contract.