Russian Oil and Gas Industry: News #2

The ruling bloc of German Chancellor Angela Merkel CDU / CSU and the Social Democratic Party of Germany will not support demands to abandon the completion of the Nord Stream 2 gas pipeline , Bloomberg reported, citing sources in the Bundestag.

GarryB wrote:... yeah, saying they will not stop it is not actually the same as helping make it happen.... it is a bit like with the Iran nuclear weapons agreement... they are just doing the bare minimum hoping everyone else does everything for them and they don't have to actually pick a side or piss off their US masters directly.

GarryB wrote:

NS2 capacity of 55 bcm per anum is severe overkill for the population and industry of Kaliningrad

Quite true, but even connected to Germany it was only ever going to be allowed to deliver half that capacity anyway.

Kaliningrad is Russian, so it would be an excellent way of delivering cheap gas to a region of Russia.

I think they already have enough gas there as per their requirement.

Cheap gas brings with it potential for growth in a range of energy intensive industries which will also make it more competitive with its european neighbours.

Setting up LNG plant at Kaliningrad to resell the gas of NS2 would require billions of dollars of investment, plus if that gas has to be sold as LNG, it would be much wiser and cheaper to build the LNG plant right at Saint Petersburg or Ust Luga.

Why would it be cheaper or wiser? It could create new jobs and work for the port at Kaliningrad... the pipeline is already mostly built, so completing it to a different terminus is the best use of the money already spent.

''Absolutely,'' Trump said, indicating his support for a potential German withdrawal from the massive energy deal with Russia.

''But I don't think Germany is in a position right now. Because Germany is in a very weakened position energy-wise. They are closing all their plants, they are closing their nuclear, they are closing their coal, they are closing a lot of plants. And they have put themselves in a very bad position, frankly, very very bad position,'' Trump said.

Germany Offered U.S. $1.2B To Save Nord Stream 2

Germany tried to dissuade the United States from following through on its threat to impose additional sanctions on the Russia-led gas pipeline project Nord Stream 2 by telling the U.S. that it would support the construction of two liquefied natural gas (LNG) terminals with US$1.2 billion (1 billion euro), German weekly Die Zeit reported on Wednesday.

According to Die Zeit’s investigation, German Vice Chancellor and Finance Minister, Olaf Scholz, wrote a letter to U.S. Treasury Secretary Steven Mnuchin in early August, promising a massive increase of public support for the construction of the LNG terminals, including by making 1 billion available, if the United States allowed Nord Stream 2 to be completed unhindered.

Germany, the endpoint of Nord Stream 2, has been looking at the economic benefits of the project, while the U.S., including President Donald Trump, have been threatening sanctions on the project and even on Germany over its support for the project.

The U.S., several European countries, including the Baltic states and Poland, as well as the European Union (EU), have expressed concern about Russia using gas sales and its gas monopoly Gazprom as a political tool.

The United States views Nord Stream 2 as further undermining Europe’s energy security by giving Gazprom another pipeline to ship its natural gas to European markets.

In July, the United States warned companies that were helping Russia with Nord Stream 2 that they should ‘get out now’ or face the consequences, as the Trump Administration steps up efforts to stop the construction of the controversial Russia-led pipeline in Europe.

In recent weeks, German Chancellor Angela Merkel has come under pressure from some of her coalition partners to drop the German support for Nord Stream 2 after the poisoning of Russian opposition leader and Putin critic, Alexei Navalny, who is now being treated in a German hospital.

According to experts who spoke to CNBC earlier this week, Germany is unlikely to pull the plug on the Nord Stream 2 project, at least not yet.

GarryB wrote:Funny thing is that if Germany does spend billions on new gas terminals to receive ships with LNG that means the Russians could divert the pipes to Kaliningrad and supply cheap piped gas to a region of Russia that probably has expensive energy costs... they can liquefy it in Kaliningrad and then ship it to the new LNG terminals in Germany to supply them with extra gas supplies if the current NSI is not sufficient to meet demand...

It will likely only cost them 3 times more than piped gas, but it will still likely be cheaper than US gas coming from much further away and likely costing 4 or 5 times more than piped gas. Most importantly it means if Russia gets a better offer... perhaps the Americans might want to buy some cheap Russian gas or the UK maybe then they could just sail past Germany and take it where it is needed.

GarryB wrote:

And @owais.usmani

I totally agree unless something really serious happens the NSII is going to get completed to Germany... the chance of it going to Kaliningrad is very low... it would really only make sense if Germany backed down because of US pressure and broke the deal so there effectively was no change the pipes could go to Germany... It would cost money to redirect them to Kaliningrad... but it could be seen as an infrastructure project to improve the energy situation in a Russian area, and reduce the cost of manufacturing and home heating etc etc.

owais.usmani wrote:The problem with redirecting NS2 to Kaliningrad is that gas demand there is already pretty much fulfilled, and unless there is a population and industrialization boom over there its not going to go up steeply anytime soon. Also, like I have said it before, for selling the NS2 gas as LNG, it would be much quicker and cheaper for Russia to construct the LNG plant right at Saint Petersburg or Ust Luga.

Russia would remain committed to NS2 till the time Germany itself backs out from the project (which is still a very low possibility). If that happens, I think Russia would just redirect its focus on selling more Gas to China and Asia and let the NS2 pipes sit there at the bottom of Baltic, till the time Germany gets stung by freedom gas and comes crying back to Russia. At that time they can sign and new contract with Germany, with a "slight" adjustment of prices.

GarryB wrote:

The problem with redirecting NS2 to Kaliningrad is that gas demand there is already pretty much fulfilled, and unless there is a population and industrialization boom over there its not going to go up steeply anytime soon.

Any gas they do get would come via hostile neighbours country pipes... they might get cheap rates but Russia would still have to pay the countries the gas transits to get there transit fees which means it costs Russia. That is fine because delivering cheap energy to Russia is something Russia should be doing anyway.

Just looking at a map, to get piped gas to Kaliningrad means crossing the borders of at least two countries from Russia... Kaliningrad shares borders with Poland and Lithuania, and for Russia to get gas to either of those two countries it would have to go through Belarus or Ukraine or Latvia.

Belarus might be friendly now, but Poland and Lithuania are not and nor is the Ukraine.

Gas piped to Kaliningrad cannot be used to bypass the Ukraine because Poland wont connect to Kaliningrad and supply europe bypassing the Ukraine... Poland and the US are the countries wanting Russia to continue using Ukraine as a transit country.

But look at the trade history of europe... trade for Russia was tiny with the east even just 15 years ago and was about 100 billion with Europe.

Since Europe has been told not to play with Russia that trade has taken a real nose dive, but trade with China in particular has taken off.

Europes gas energy needs might be increasing, but is not Russias problem... they tried to solve supply irregularities caused by Ukraine stealing gas meant for other customers, for which Europe blamed Russia. Nord Stream II and South Stream II were intended solutions to prevent unreliable supply of gas to customers on Europe, but Europe and the US have taken measures to block both projects.

Russia is not going to have problems selling gas... everyone needs energy and compared with coal it is relatively clean.

With US encouragement the EU is pushing Russia away so Russia needs to accept that the EU are self harming nutbags and look to how they can sell the product they have a good supply of. Liquification and then shipping world wide without needing pipes makes the gas more expensive but also more valuable so you spend more delivering the product but you get more money for the product to cover your costs and it frees you to sell to anyone.

Right now cheap gas in Kaliningrad is probably being heavily subsidised by Russia paying transit fees to keep costs down...pumping it directly means they get the gas cheap without two other countries making money on the delivery for effectively doing bugger all except collecting transit fees.

Also, like I have said it before, for selling the NS2 gas as LNG, it would be much quicker and cheaper for Russia to construct the LNG plant right at Saint Petersburg or Ust Luga.

It is a question of using a pipeline that is already 3/4ths built.

Russia would remain committed to NS2 till the time Germany itself backs out from the project (which is still a very low possibility). If that happens, I think Russia would just redirect its focus on selling more Gas to China and Asia and let the NS2 pipes sit there at the bottom of Baltic, till the time Germany gets stung by freedom gas and comes crying back to Russia. At that time they can sign and new contract with Germany, with a "slight" adjustment of prices.

It would be important to look at the contract details... a cancelled contract might allow companies to recover costs by recovering pipes and selling them to offset the money they lost in the venture... which could mean the whole thing gets lifted up. There will be pumping stations along its length where the turbines and equipment could be recovered and reused somewhere else.

Personally I would like to see them build a gas pipeline that goes down through north korea to south korea and then across the water to Japan so Japan could get cheap gas energy, and so could South Korea and North Korea and South Korea could earn transit fees and relatively cheap gas supplies.

The US would have a shit fit of course...  if Germany and South Korea and Japan are lucky they might threaten to withdraw all their soldiers from all three countries....  

I've never had much faith the Eurostani 4th Reich, and events are unhappily proving my skepticism to be well founded.

They fall in line on cue to sing the same hymn, whether it is highly likely poisonings, or election meddling... how can you treat such morons seriously?

Honestly when the US economy falls over their paper money will be worthless which will have traumatic results for Europe too... I mean traditionally rats don't abandon a ship till they think it is sinking, but water has been coming on board this ship for decades... they got to first class cabins and refused to continue... will they jump ship or go down singing and totally in denial...

Aristide wrote:
As usual your nonsense proved wrong.

Aristide wrote:

GarryB wrote:

The problem with redirecting NS2 to Kaliningrad is that gas demand there is already pretty much fulfilled, and unless there is a population and industrialization boom over there its not going to go up steeply anytime soon.

Any gas they do get would come via hostile neighbours country pipes... they might get cheap rates but Russia would still have to pay the countries the gas transits to get there transit fees which means it costs Russia. That is fine because delivering cheap energy to Russia is something Russia should be doing anyway.

Just looking at a map, to get piped gas to Kaliningrad means crossing the borders of at least two countries from Russia... Kaliningrad shares borders with Poland and Lithuania, and for Russia to get gas to either of those two countries it would have to go through Belarus or Ukraine or Latvia.

Belarus might be friendly now, but Poland and Lithuania are not and nor is the Ukraine.

Gas piped to Kaliningrad cannot be used to bypass the Ukraine because Poland wont connect to Kaliningrad and supply europe bypassing the Ukraine... Poland and the US are the countries wanting Russia to continue using Ukraine as a transit country.

But look at the trade history of europe... trade for Russia was tiny with the east even just 15 years ago and was about 100 billion with Europe.

Since Europe has been told not to play with Russia that trade has taken a real nose dive, but trade with China in particular has taken off.

Europes gas energy needs might be increasing, but is not Russias problem... they tried to solve supply irregularities caused by Ukraine stealing gas meant for other customers, for which Europe blamed Russia. Nord Stream II and South Stream II were intended solutions to prevent unreliable supply of gas to customers on Europe, but Europe and the US have taken measures to block both projects.

Russia is not going to have problems selling gas... everyone needs energy and compared with coal it is relatively clean.

With US encouragement the EU is pushing Russia away so Russia needs to accept that the EU are self harming nutbags and look to how they can sell the product they have a good supply of. Liquification and then shipping world wide without needing pipes makes the gas more expensive but also more valuable so you spend more delivering the product but you get more money for the product to cover your costs and it frees you to sell to anyone.

Right now cheap gas in Kaliningrad is probably being heavily subsidised by Russia paying transit fees to keep costs down...pumping it directly means they get the gas cheap without two other countries making money on the delivery for effectively doing bugger all except collecting transit fees.

Also, like I have said it before, for selling the NS2 gas as LNG, it would be much quicker and cheaper for Russia to construct the LNG plant right at Saint Petersburg or Ust Luga.

It is a question of using a pipeline that is already 3/4ths built.

Russia would remain committed to NS2 till the time Germany itself backs out from the project (which is still a very low possibility). If that happens, I think Russia would just redirect its focus on selling more Gas to China and Asia and let the NS2 pipes sit there at the bottom of Baltic, till the time Germany gets stung by freedom gas and comes crying back to Russia. At that time they can sign and new contract with Germany, with a "slight" adjustment of prices.

It would be important to look at the contract details... a cancelled contract might allow companies to recover costs by recovering pipes and selling them to offset the money they lost in the venture... which could mean the whole thing gets lifted up. There will be pumping stations along its length where the turbines and equipment could be recovered and reused somewhere else.

Personally I would like to see them build a gas pipeline that goes down through north korea to south korea and then across the water to Japan so Japan could get cheap gas energy, and so could South Korea and North Korea and South Korea could earn transit fees and relatively cheap gas supplies.

The US would have a shit fit of course...  if Germany and South Korea and Japan are lucky they might threaten to withdraw all their soldiers from all three countries....  

I've never had much faith the Eurostani 4th Reich, and events are unhappily proving my skepticism to be well founded.

They fall in line on cue to sing the same hymn, whether it is highly likely poisonings, or election meddling... how can you treat such morons seriously?

Honestly when the US economy falls over their paper money will be worthless which will have traumatic results for Europe too... I mean traditionally rats don't abandon a ship till they think it is sinking, but water has been coming on board this ship for decades... they got to first class cabins and refused to continue... will they jump ship or go down singing and totally in denial...

As usual your nonsense proved wrong.

German vice chancellor Scholz yesterday said NS II will be completed and thats it.

Rodion_Romanovic wrote:https://iz.ru/1070517/2020-10-07/polsha-oshtrafovala-partnerov-severnogo-potoka-2-na-60-mln

The Polish regulator UOKIK (Urząd Ochrony Konkurencji i Konsumentów, "Competition and Consumer Protection") fined five partners of the Russian company Gazprom for the construction of the Nord Stream 2 gas pipeline, for an amount of approximately 60 million dollars.  The reason was the lack of a permit to do a job.  These companies are forced to withdraw from pipeline contracts within a month, the regulator said.  "Gazprom" itself was also fined 7.6 billion dollars.  The other companies affected are Engie Energy, Uniper, OMV, Shell and Wintershall.

Here in the polish website https://www.uokik.gov.pl/aktualnosci.php?news_id=16814