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    Russian Oil and Gas Industry: News #4

    Kiko
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    Post  Kiko Thu Oct 13, 2022 11:00 pm

    Miller: Russian turbines to be installed on new Turkish Stream lines, 10.13.2022.

    Miller: Russian turbines to be installed on possible new Turkish Stream lines.

    The new strings of the Turkish Stream will use Russian-made turbines, the head of Gazprom, Alexei Miller, said on Channel One.

    “I won’t say now how many of them there will be, threads, we must first decide, of course, on the volume. But in any case, these are new gas transmission capacities through the Black Sea , in the Turkish Stream corridor, with the creation of a trade hub on the Turkish border and the border of the European Union.<...> As for the turbines, of course, these will be Russian-made turbines," he said.

    The head of Gazprom noted that the company is "quickly building" offshore gas pipelines. He recalled that Nord Stream 2 was being completed at the final stage without the technological and technical participation of foreign partners.

    Turkish Stream is an export pipeline consisting of two lines. One of them is designed to supply gas from Russia through the Black Sea to Turkey , and the second - to the countries of Southern and South-Eastern Europe. Its design capacity reaches 31.5 billion cubic meters annually. The operation of the gas pipeline began in January 2020.

    https://ria.ru/20221013/turbiny-1823862960.html

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    Post  GarryB Fri Oct 14, 2022 6:49 am

    Russian President Vladimir Putin, during a meeting with Turkish leader Recep Tayyip Erdogan in Astana, discussed the creation of a gas hub in Turkey for Europe.

    I have said before that I thought that with all the BS from the EU regarding Russian gas supplies that eventually Russia will probably end up just piping gas to Turkey and let Turkey negotiate prices with the EU for cheap Russian gas...

    Of course Turkey can sell gas to the EU at the going rate while the volume they will be buying from Russia and their ability to choose long term contracts means they could get it very cheap and pick and choose who gets it cheap and who pays more in the EU.

    With that sort of leverage Turkey might get to join the EU rather quickly... if they are still interested that is.

    Would be a real power shift and for Russia they will still be making good money and selling product.

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    Post  owais.usmani Fri Oct 14, 2022 7:47 am

    JohninMK wrote:Sprinter
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    Vladimir Putin announced the start of construction of the "Force of Siberia-2"

    https://tass.com/economy/1521713

    Russia will start construction of Power of Siberia 2 gas pipeline, Putin says


    It is said that efforts to join Asian and European segments of the national gas transmission system will start


    MOSCOW, October 12. /TASS/. Russia will initiate construction of the Power of Siberia 2 and its Soyuz-Vostok segment in Mongolia shortly, President Vladimir Putin said on Wednesday at the Russian Energy Week forum.

    "We intend to expand the geography of our supplies. We will identify key infrastructural assets as early as in the near future and will start their construction, including such promising projects as the Power of Siberia 2 and its Soyuz-Vostok segment in Mongolia," the head of state said.

    Efforts to join Asian and European segments of the national gas transmission system will start, Putin noted. Liquefied natural gas terminal projects will continue receiving support, he added.

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    Post  Kiko Fri Oct 14, 2022 2:17 pm

    Erdogan Orders to Promptly Start Work on Gas Hub Idea, 10.14.2022.

    ANKARA (Sputnik) - Turkish President Recep Tayyip Erdogan said on Friday that he, as well as Russian President Vladimir Putin, has ordered to promptly start work on the gas hub idea.

    "Together with Putin, we have instructed our Ministry of Energy and Natural Resources and the relevant institution on the Russian side to conduct a joint study … There is no need to wait here," Erdogan told reporters on his way home from Astana.

    Erdogan also mentioned that Gazprom CEO Alexey Miller was present during his meeting with Putin.

    "Of course, we are taking all kinds of steps in the field of security [of the gas hub project], providing what is required, continuing our work accordingly," Erdogan added.

    Earlier this week, Putin said that Russia could move the transit of gas from the Nord Stream network to the Black Sea region and Turkey. Putin and Erdogan have discussed this idea and ordered relevant departments to work out this issue.

    Gas deliveries to Europe had to be rerouted following attacks against the Nord Stream pipeline system, which suffered from a series of explosions on September 26. The operator, Nord Stream AG, said the damage was unprecedented, adding it is not clear how long it would take to repair the pipeline.

    https://sputniknews.com/20221014/erdogan-orders-to-promptly-start-work-on-gas-hub-idea-1101838624.html

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    Post  caveat emptor Fri Oct 14, 2022 3:59 pm

    Without deliveries to Europe, there will be a problem what to do with Yamal gas, which is highest NG producing region in Russia. All pipes lead to Europe, via NS1,2, Ukraine or Turkey. From almost 200 bcm, less than 50 bcm goes through Turkey and 8.5 bcm goes to Yamal LNG. One of the two will have to happen: repair Russo-EU ties or just cut production, which would be a huge hit for Gazprom and Russia, financially. At least, for next 5 years.
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    Post  kvs Fri Oct 14, 2022 4:56 pm

    No.  Power of Siberia I has a capacity of 38 bcm and Power of Siberia II will double it.   Russia is not going to see $40 per thousand
    cubic meter gas prices any time soon.   So even with the reduced shipment to U-rope (25 bcm via Nord Stream I thanks to EU-tard
    limitations on its 50 bcm capacity) (NS II is a non-issue), it will not see much of a drop in revenues from its 10 year running average.

    $300/tcm x 150 bcm = $45 billion

    $600/tcm x 60 bcm = $36 billion

    Russia is still shipping via Turk Stream and will increase the capacity.  

    Even if the gas revenue fell to zero, that would not damage Russia's economy for 5 years.   Assuming the rather meaningless nominal
    GDP value in dollars of $1.5 trillion we have 45/1,500 = 3%.   A more realistic range of hit is 1-2% and that will attenuate rapidly from
    year to year.   The import substitution effect will clearly offset this hit and will not attenuate with time but rather contribute to more
    GDP growth.

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    Post  caveat emptor Fri Oct 14, 2022 5:44 pm

    kvs wrote:No.  Power of Siberia I has a capacity of 38 bcm and Power of Siberia II will double it.   Russia is not going to see $40 per thousand
    cubic meter gas prices any time soon.   So even with the reduced shipment to U-rope (25 bcm via Nord Stream I thanks to EU-tard
    limitations on its 50 bcm capacity) (NS II is a non-issue), it will not see much of a drop in revenues from its 10 year running average.

    $300/tcm x 150 bcm = $45 billion

    $600/tcm x 60 bcm = $36 billion

    Russia is still shipping via Turk Stream and will increase the capacity.  
    Power of Siberia I doesn't take gas from Yamal. I thought that is already clear. PoS II will take at least 5 years to be built and then few years to get to max capacity. Not to mention that it won't be able to completely substitute European pipelines. Capacity quoted are in the region of 55-60 bcm. For example PoS I will get to full capacity only end of next year, beginning of 2024. TurkStream has a capacity of 31 bcm and it is working in full capacity. Read my message and then comment. Blue Stream + Turkish Stream are, together, 47 bcm per year. One pipe from TS of 15.5 bcm goes to Europe, one ends in Turkey. Blue Stream gas goes completely to Turkey. Making new pipes to Turkey is several years out. Problem is what to do with over 100 bcm of Yamal production till then. Only pipelines go to Europe and Yamal LNG has capacity of 8.5 bcm. Arctic LNG 2, built by Novatek, has been postponed for, at least, a year and will only start end of 2023. Whole Arctic 2 capacity will be 25 bcm and it will not fully go online before 2026-7.

    NS I+II had 110 bcm combined capacity. According to reports NS I is out for the time being and one 27.5 bcm is left undamaged in NS II. 
    Of course, there is a pipelines that go through Belarus and Ukraine.  
    However, my point is that Ru-EU have to find a way to conduct business. It makes sense for both. 
    I didn't mention anything about GDP so i won't comment on that. 
    Problem is, as i stated, what to do with all Yamal gas? This is Gazprom's most profitable region and brings biggest share of revenues from EU market. 
    There will be enough LNG to go around, especially starting from 2024, as by the end of this year till end of 2024 new 80 bcm equivalent come online. This problem will need political solution.

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    Post  caveat emptor Fri Oct 14, 2022 5:54 pm

    kvs wrote:
    Even if the gas revenue fell to zero, that would not damage Russia's economy for 5 years.   Assuming the rather meaningless nominal
    GDP value in dollars of $1.5 trillion we have 45/1,500 = 3%.   A more realistic range of hit is 1-2% and that will attenuate rapidly from
    year to year.   The import substitution effect will clearly offset this hit and will not attenuate with time but rather contribute to more
    GDP growth.
    Gazprom needs sufficient revenues from exports, since domestic consumption price is subsidized via foreign sales. As well as, social gasification. Hemce, binging revenues from gas sales to zero would produce chain event for the whole Russian economy. Akin to what is happening now in Europe. 
    Russian state gets sizeable amount of revenues from export excise, as well as, through Gazprom's dividend payment.

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    Post  lancelot Fri Oct 14, 2022 5:57 pm

    We have done the math here before. Heck I did it here before. Between Power of Siberia 2 and the LNG projects both you get roughly the same volume as that which used to go to the EU being moved to Asia instead.
    Also, Arctic LNG 2 is not the only LNG project.

    Another major issue which no one is talking about is how Belarus, which is a major gas importer I think roughly 20 bcm just for them, is planning to reduce their own natural gas consumption. First by building two 1.1GWe nuclear power plants, and now with plans for hydroelectric and improving the energy efficiency of existing natural gas power plants. The nuclear power plants alone are expected to offset 5 bcm of gas imports.

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    Post  sepheronx Fri Oct 14, 2022 6:18 pm

    It will mean money for Russia anyway as they will be subcontracted for the NPP anyway.

    I think russia will up their exports to Asia too. I know Japan was secretly pushing for more gas contracts but we will see. They are pretty cucked as is right now.

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    Post  caveat emptor Fri Oct 14, 2022 7:14 pm

    lancelot wrote:We have done the math here before. Heck I did it here before. Between Power of Siberia 2 and the LNG projects both you get roughly the same volume as that which used to go to the EU being moved to Asia instead.
    Also, Arctic LNG 2 is not the only LNG project.

    Another major issue which no one is talking about is how Belarus, which is a major gas importer I think roughly 20 bcm just for them, is planning to reduce their own natural gas consumption. First by building two 1.1GWe nuclear power plants, and now with plans for hydroelectric and improving the energy efficiency of existing natural gas power plants. The nuclear power plants alone are expected to offset 5 bcm of gas imports.
    Problem that arises is that current production without Europe will have nowhere else to go. At least for next 2-3 years and full replacement will occur only in 5-7 years. Second thing is that we are talking about current levels of production, and not future, which was suposed to grow by further developing Bovanenkovo field. Don't forget that both Baltic LNG and Arctic 2 were planned before all this happened and where we would have NS I & II working fully, as well. 
    As for Belarus, their initial plan was to produce this electricity for exports. They don't use gas for production of electricity, but for industry and household consumption. 
    Actually, i would prefer if that gas would go to more price competitive markets, since Belarus gets gas at very low prices. But, that will not happen.

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    Post  lancelot Fri Oct 14, 2022 7:59 pm

    So what. The fact is Nord Stream 2 was never put into service, so the gas fields for it were never ramped up to meet its demand. When a pipeline gets into service it takes years for production to ramp up. Just look at what is happening in Power of Siberia. It only makes sense to consider how to displace current Russian gas exports to Europe, not some alternative timeline demand which never actually happened. And China is expected to have gargantuan gas demand, because of environmental targets to reduce air pollution in major cities, so I doubt Power of Siberia 2 will be the end of it.

    The major issue Russia has is how to get their oil out to alternative markets and not crash oil production because of the fluctuations in demand. People overestimate the economic value of Russian gas exports.

    You are incorrect with regards to Belarus. They do use gas for production of electricity. This is just one example with 2.4 GW of generation capacity.
    https://www.power-technology.com/marketdata/lukoml-sdpp-thermal-power-plant-belarus/

    In fact before the nuclear power plants in Belarus were started up gas provided 97% of electric generation in Belarus.

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    Post  caveat emptor Fri Oct 14, 2022 8:59 pm

    lancelot wrote:So what. The fact is Nord Stream 2 was never put into service, so the gas fields for it were never ramped up to meet its demand. When a pipeline gets into service it takes years for production to ramp up. Just look at what is happening in Power of Siberia. It only makes sense to consider how to displace current Russian gas exports to Europe, not some alternative timeline demand which never actually happened. And China is expected to have gargantuan gas demand, because of environmental targets to reduce air pollution in major cities, so I doubt Power of Siberia 2 will be the end of it.

    The major issue Russia has is how to get their oil out to alternative markets and not crash oil production because of the fluctuations in demand. People overestimate the economic value of Russian gas exports.
    Gas fields for Bovanenkovo are already prepared and some of them started to go online. That's not much of an issue, though. 
    Most of the current production from Yamal will have to be mothballed though for several years. Roughly two thirds of all exports to Europe could stop with exception of Turkish direction. 
    Interconnection to Asian market is a good thing due to diversification even if financially it is not ideal due to high cost of building up pipelines to Asia. 
    As i posted in one of my previous messages, economic value of Russian gas exports is much higher than what appears on the surface. Let's put aside direct revenues. Gazprom has a massive CAPEX which it funds directly from those sales. 
    There are two sustainable roads in the future: they cut CAPEX or they raise price of gas for domestic market. Second option is, obviously, politically sensitive, but might be needed as they need to finish current investment cycle. There will be many jobs higher up value chain that are financed by sales to Europe, overwhelmingly.
    As for sales to China PoW I might be fully utilized by 2024, according to plan and that is 38 bcm coming from Siberian fields. 
    At best, we might get 60 bcm from PoW II by early 2030s.
    As for Belarus, you are completely right. I've always wanted them to maximize profits from hydrocarbons sales to open markets instead of going to Belarus, since Lukashenko sided with Russia only because his own ass got in danger.
    Other potential source of additional revenues will be sales of natgas to CIS countries, especially Kazakhstan, since they can afford to pay and don't have readily available alternative sources.
    As for oil production, i believe that they might finally give up on some old Western Siberian fields as they are pain in the ass to keep in current environment.

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    Post  caveat emptor Fri Oct 14, 2022 9:02 pm

    In all US made it like bandits on the back of EU and Russians. I don't think that they expected this much stupidity from Europeans.

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    Post  JohninMK Fri Oct 14, 2022 11:53 pm

    Anyone find out more on this, like which pipeline(s)?

    Sprinter
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    Gazprom: The arm of the "North Stream" is filled with sea water for hundreds of kilometers
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    Post  franco Sat Oct 15, 2022 2:16 am

    JohninMK wrote:Anyone find out more on this, like which pipeline(s)?

    Sprinter
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    Gazprom: The arm of the "North Stream" is filled with sea water for hundreds of kilometers

    My understanding is all 3 of the damaged lines.

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    Post  GarryB Sat Oct 15, 2022 6:37 am

    In all US made it like bandits on the back of EU and Russians. I don't think that they expected this much stupidity from Europeans.

    Not really.... they are killing the golden goose to make some short term profits.

    After this winter when Europe wants more gas and can't get it from Russia because the US blew up the pipes and they can't get it from the US because all gas production plus gas imports likely from Russia will be going to the domestic market and prices in europe will go so high companies that rely on it will go out of business, and those companies that survive are going to look at other alternatives to gas for energy, which in the longer term is going to reduce demand for US gas.

    For Russia things are not as bad as you suggest... gas demand during the summer is rather a lot less for Europe than during the winter and some of that is filling storage tanks too so the actual consumption of gas in summer is not that high and they already scale their extraction to meet the needs of the market so if there are no active pipes to deliver gas to Europe they can just leave it in the ground.

    They mention in that article about expanding exports of gas by building pipelines to Asia that they are also adding other pipes so gas from the west of the country can be transferred to the east for moving excess supplies of gas for the European market to the Asian market.

    This is certainly the US screwing the EU, but the point was to damage Russia and that simply is not happening... they are getting more income from less product sales and they are expanding their capacity to ship gas too which will be useful for delivering energy to the rest of the world.

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    Post  lancelot Sat Oct 15, 2022 6:58 am

    Some factories in the EU are already switching from burning natural gas to burning oil. The price of natural gas in the EU is ridiculous and not cost effective.
    It will be "interesting" to watch what will happen to these factories once the EU sanctions on Russian oil imports hit.

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    Post  lancelot Mon Oct 17, 2022 4:30 am

    Turns out, surprise surprise, that the loss of production at Sakhalin-1 was pure sabotage on the part of Exxon and seems to have had nothing to do with precious US know-how on arctic drilling as reported by Western media stooges. They just refused to ship oil via Sovcomflot tankers and then cut production.

    And... Exxon are gone.

    https://www.kommersant.ru/doc/5619144
    17.10.2022
    As Kommersant found out, the immediate reason for stopping production at Sakhalin-1 was the refusal of the project operator, the American Exxon, to ship oil via Sovcomflot tankers, after they lost coverage from Western insurers as a result of sanctions. Sovcomflot attracted a Russian insurer, but Exxon was not satisfied with this, although shipments from the Sakhalin-2 project continued in a completely similar situation. As a result, in October, the Russian authorities transferred project management from Exxon to Rosneft.
    ...
    Kommersant has learned more about the impact of Western sanctions on the Sakhalin-1 project, which is being developed by a consortium of American ExxonMobil, Indian ONGC, Japanese Sodeco and Rosneft under a production-sharing agreement. The project operator Exxon (30% share), which decided in March to withdraw from the Russian Federation due to the fighting in Ukraine, announced at the end of April force majeure at Sakhalin-1, as a result of which production began to decline and in May completely stopped.
    ...
    According to Kommersant's sources, the problem arose due to Exxon's refusal to continue shipping oil to Sovcomflot tankers, which was sanctioned at the end of March. As a result, their ships lost insurance from the International Group of Mutual Insurance Clubs (International Group of P&I Clubs).

    In June, the head of Sovcomflot, Igor Tonkovidov, announced that the problem would be solved by attracting Russian insurers. So, according to Kommersant's interlocutors, Sovcomflot received insurance for its tankers from the Russian Ingosstrakh. However, Exxon insisted on mandatory P&I insurance and refused to resume shipments. As a result, production at the project stopped in May due to an overflow of oil tanks in the port of De Castries, from where it is shipped to the world market. Exxon and Sovcomflot did not respond to a request from Kommersant. Rosneft forwarded questions to the Ministry of Energy and Exxon.

    P&I is insurance of broad, uncertain risks that some insurers usually do not cover, explains Anton Demchenko, partner of the Delcredere Bar association, for example, shipowner's liability after a collision, environmental pollution. According to him, the insurance coverage of mutual insurance clubs is a condition for admission to many international ports. However, the lawyer clarifies that Russian carriers that were sanctioned have carried out significant measures that should solve the insurance problem.
    ...
    At the same time, the Sakhalin-2 project, which also uses the services of Sovcomflot as the main carrier of LNG and oil, did not reduce production and shipments. On September 29, Andrey Okhotkin, Commercial Director of Sakhalin Energy (project operator), announced the company's readiness to help Sakhalin-1 with oil sales: "We know the markets. We have the same carrier with Sakhalin-1 — Sovcomflot. The vessels are known to us, the operations are known."

    In October, Russian President Vladimir Putin signed a decree on the intention to transfer the project property to a new Russian legal entity — Sakhalin-1 LLC, a similar scheme for changing the operator in May was used in Sakhalin-2. Instead of Exxon, management of Sakhalin-1 was transferred to Rosneft, which owns 20% of the project.

    After the creation of an LLC, foreign shareholders of the project must notify the Russian Federation within a month of their readiness to remain in it, otherwise their share will be sold by the Russian authorities. Kommersant's interlocutors in the industry believe that Exxon will not hold on to Sakhalin-1 ,and its share may eventually go to Rosneft. Exxon itself estimated losses in connection with the loss of its stake in Sakhalin-1 at $3.4 billion.

    Sakhalin-1's production plan for this year was 8.9 million tons of oil. According to the Ministry of Energy, as a result of this situation, production may fall to 4.2 million tons against 11 million tons in 2021. Such a forecast suggests that production will still be restarted this year: in August, the project's shareholder, ONGC, reported expectations for a recovery in shipments in October, but so far they have not started.

    An additional problem is that due to the lack of oil production, Sakhalin-1 does not produce associated gas, which is usually used to supply consumers in Sakhalin, as well as the Khabarovsk Territory via the Okha—Komsomolsk gas pipeline. Currently, the Sakhalin-2 project transfers the missing volumes of gas to Russian consumers.

    However, Andrey Okhotkin said on September 29 that in November—December, even together with supplies from Gazprom's Kirinskoye field (Sakhalin-3), there may not be enough gas. He also noted that the situation may lead to a decrease in LNG production at Sakhalin-2, which, given the current global LNG prices, would be extremely unprofitable. The Sakhalin authorities, according to Kommersant's interlocutors, estimate the lost local budget revenues from the Sakhalin-1 shutdown at 38 billion rubles in 2022.

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    Post  kvs Mon Oct 17, 2022 11:31 am

    The power trippers at Exxon should savour the flavour of their own shit. Lunatics who think they own the planet and that everyone
    outside of NATzO is their serf/slave.

    We are seeing here how detached from reality the colonial western elites are. They expected to snap their fingers and for Russia
    to go under. But it is they who are going under. Perhaps not quickly but still sinking. I think this is one of the reasons for Russia
    to take its sweet time in Ukraine. Let these western maggots keep doubling down into oblivion.

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    Post  JohninMK Wed Oct 19, 2022 12:43 pm

    AZ 🛰🌏🌍🌎
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    ‼🇳🇱🇹🇷🇭🇺The Dutch operator of the Turkish Stream returned the license to the pipeline — Hungarian Foreign Minister‼

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    JohninMK
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    Post  JohninMK Wed Oct 19, 2022 3:41 pm

    Although the Daily Mail this isn't too bad.

    My bet would be nuclear demolition charges.

    The Swedes must have had a large amount of 'evidence' to cart away. Then prevent anyone else seeing it.

    https://www.dailymail.co.uk/news/article-11326855/Extraordinary-images-emerge-mangled-Nord-Stream-attacked-extreme-force.html
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    Post  GarryB Thu Oct 20, 2022 2:32 am

    My bet would be nuclear demolition charges.

    The Swedes must have had a large amount of 'evidence' to cart away. Then prevent anyone else seeing it.

    If they did use nuclear demolition charges a nuke in the power range of a few tons of HE are called backpack nukes for a reason... they are very small and relatively portable.

    The 152mm nuclear artillery shell the Russians use is less than 50kgs, and it would be 2KT or 2 thousand tons of HE equivalent... ie 2 million kilogrammes of HE equivalent.

    Wonder how this refusal to share information with HATO will effect their chances of joining HATO... maybe there are all sorts of things they have in those waters they don't want others to see... or maybe it is near where they were building a structure to steal oil directly from the pipes and that is why the Americans blew them up there.

    The really funny thing is that there were objections about the pipe going near those islands... I remember saying at the time that the extra cost and delay of rerouting them around could be recovered over years of use because transit fees would not have to be paid to these countries which would cost them billions.

    It is interesting they did it in "friendly" waters to minimise the risk of backlash and control the site in the aftermath.
    caveat emptor
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    Post  caveat emptor Thu Oct 20, 2022 8:41 am

    GarryB wrote:
     or maybe it is near where they were building a structure to steal oil directly from the pipes and that is why the Americans blew them up there.
    There's no oil pipelines that run through Baltic. Other than that tiny fact, your theory sounds completely plausible. Pray tell.🙃

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    Post  Kiko Thu Oct 20, 2022 10:04 pm

    Russia is forced to export coal at a 50-60% discount. 10.20.2022.

    Deputy Prime Minister Belousov: Russian coal companies are forced to export coal at a discount of 50-60%.

    Russian coal companies, against the background of external restrictions, are forced to export coal at a discount of 50-60%, but even in such conditions they remain profitable, said First Deputy Prime Minister Andrey Belousov, speaking at the Made in Russia export forum.


    According to Belousov, thanks to cheap energy resources, Russia was able to calmly go through all the crises. According to him, discounts on coal are 50-60%, which is quite acceptable and cost-effective. The same, according to the Deputy Prime Minister, applies to oil and mineral fertilizers, which are also sold at a discount, Interfax reports .


    Earlier, Bloomberg reported that China increased the supply of oil, oil products and coal from Russia by approximately 75%.

    https://vz.ru/news/2022/10/20/1183038.html

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