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    Russian Oil and Gas Industry: News #4

    caveat emptor
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    Post  caveat emptor Wed Jan 11, 2023 6:29 pm

    @fp
    It's not so simple.  Let's see how things will progress. Part of the produced oil, even if it is not directly exported, ends up as export of oil derivatives. I'm not sure who will take that volume of products, as lion share was going to US and EU markets.
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    Post  GarryB Thu Jan 12, 2023 12:33 am

    Why the F would India join the oil price cap on Russian oil, especially as the whole essence of its new deals and increased energy deals with Moscow over the past year have been on the basis that it's exactly not going to join in on any sanctions or caps against the Russian economy? Would be quite a U-turn at this stage no?

    Dumb article penned by doomers or liberal 5th column types

    Ironically it suits countries to follow the oil price cap to allow them to sell to western countries, but for domestic energy purchases and consumption for them to buy Russian energy at any price they will sell for for processing into other products which they can then sell to the G7 for a higher price by claiming it is not Russian oil but Indian diesel or Indian Petrol...

    It means the G7 +1 can no longer buy cheap Russian energy and have to buy processed stuff from third parties, which is really going to hurt G7 +1 countries refineries who need raw materials to process and produce various chemicals and materials, for whom they will now need to find a different supplier, like Venezuela... or Iran with whom they have burned bridges... and seized money from.

    It's not so simple. Let's see how things will progress. Part of the produced oil, even if it is not directly exported, ends up as export of oil derivatives. I'm not sure who will take that volume of products, as lion share was going to US and EU markets.

    A previous article mentioned that Russian energy sales were very euro dependent and also therefore very weather dependent with a lot of fluctuation in volumes depending on the different times of year, so their ability to vary the oil and gas flows is an intrinsic part of the setup.

    Any sources becoming unproductive just increases the value of existing sources because investment in finding new resources is at an all time low.

    This will actually start to push prices up in itself...

    Ironically the reduction in income from the discounts should be countered by the increased income of using their own shipping and insurance and brokering services, so they are not only making more money in other areas, but the Europeans are losing income from the system of exports and distribution...

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    Post  caveat emptor Thu Jan 12, 2023 1:17 am

    @Garry
    European oil derivatives demand was pretty stable, with the exception of heating oil, which is was a small part of derivative exports to begin with.
    Problem that exists with oil derivatives in new founded situation is a problem whole oil industry has and that is lack of transportation means. There won't be any new pipelines to China in next 5 years and domestic tanker fleet still doesn't have enough capacity. I suspect that product tankers will be easier to obtain, as they are of lower tonnage and easier and faster to build.
    As for oil price, that Is completely different story. In mid and long term price will go higher, but this year might prove problematic as world economies will slow down due to rise of CB rates and ensuing recession in some countries.

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    Post  GarryB Thu Jan 12, 2023 2:43 am

    If the price goes down then OPEC will cut production... after years of the US and the west trying desperately to reduce the price of energy to hurt Venezuela and Russia, I think most oil producing nations are sick of the low prices and want to start making good money again so they can fix things and spend money on things that have been neglected the last decade or so because of low prices.

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    Post  Kiko Mon Jan 16, 2023 11:34 am

    Novak: oil and gas revenues of the Russian budget grew by 28% in 2022, 01.16.2023.

    Deputy Prime Minister Alexander Novak said that Russian budget revenues from the oil and gas industry grew by 28%, or 2.5 trillion rubles, in 2022.

    According to RIA Novosti , he said this at a meeting with Prime Minister Mikhail Mishustin.

    Earlier, Novak said that contracts for the export of oil from Russia for February were signed , the companies did not report problems due to sanctions.

    https://russian.rt.com/business/news/1097897-novak-neftegazovye-dohody-byudzhet

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    Post  caveat emptor Mon Jan 16, 2023 12:10 pm

    Shipments of gas over Power of Siberia came at 15.5 BCM. I expected higher volume tbh. I'm not sure if this volume came as a result of China's lockdowns or that Chayandinskoye field is still not up to the full production.
    As a reminder, originally capacity of gas for China was supposed to be 38 BCM, but that was later raised to 44bcm by 2025.

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    Post  GarryB Mon Jan 16, 2023 7:46 pm

    Not just a question of how much gas you can pump through the pipes... they need to have distribution at the other end and also the infrastructure to actually use the gas commercially or domestically which does not suddenly appear just because more gas arrives.

    They traditionally burn coal because it is cheaper for them, but now they can get cheaper gas from Russia that used to go to the Europeans, it will take time to switch to the cheaper energy source.

    They are in the enviable position that they are getting more energy directed to them from Russia that is relatively clean natural gas to replace their dirty coal systems while they can world on wind and solar power safe in the knowledge that if the sun and wind don't cooperate that they have reliable cheap energy to keep the light bulbs lit and everything working as they work on improving solar and wind to sell to europe and the west and the rest of the world.

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    Post  caveat emptor Tue Jan 17, 2023 1:02 am

    China consumes over 360bcm of natgas annually. And they have infrastructure. For example from Turkmenistan alone they import about 30 BCM annually. They import over 70 BCM annually via LNG. They have infrastructure and demand for Russian gas. That's not the problem.

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    Post  lancelot Wed Jan 18, 2023 10:17 pm

    IIRC the planned deliveries to China over PoS pipeline this year were 15 bcm. The pipeline extension to the new gas fields north of Irkutsk (Kovyktinskoye gas field) were only finished this year. New pumping stations were put online. There should be a huge expansion in deliveries to China this year of 2023.

    The problem the Chinese have with infrastructure is that traditionally most of the gas users were in the southern regions but Power of Siberia comes in from the northward direction. That region traditionally relied on coal for thermal use.

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    Post  kvs Wed Jan 18, 2023 11:17 pm

    The gas from Russia should help them reduce the use of coal which has been causing insane air quality problems. It has also
    polluted China and the East China Sea with mercury. This region is the global hotspot for mercury and all of it is from coal.

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    Post  JohninMK Thu Jan 19, 2023 6:34 am

    AZ 🛰🌏🌍🌎
    @AZgeopolitics
    ·
    3h
    🚫 🛢 🇷🇺🇺🇦🇪🇺"Gazprom reduced gas pumping through Ukraine on January 19 by 23%" - Gazprom

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    Post  GarryB Thu Jan 19, 2023 8:37 pm

    China consumes over 360bcm of natgas annually. And they have infrastructure. For example from Turkmenistan alone they import about 30 BCM annually. They import over 70 BCM annually via LNG. They have infrastructure and demand for Russian gas. That's not the problem.

    The Chinese are not magic... if they planned to pump 15 bcms through a pipe then they expect to use a large portion of that, but when they actually pump double that due to the price and other considerations then they, like anyone else could be caught unprepared... but of course with the new situation and new state of affairs where Russia wants to shift from providing cheap energy to the EU to providing cheap energy to Asia, then they will need to make adjustments and changes... shifting from one coal plant to another coal user is easy... the quickest easiest way would be to put railway tracks direct to the new site and you have coal deliveries on a regular and stable basis.

    With gas laying pipes is not so quick, but ends up not just cheaper, but also cleaner, and if you plan ahead and make the pipe capacity rather bigger than you need you can scale its use to consumption rate so you don't have to keep building new pipelines every few years to meet the needs of your industry.

    "Gazprom reduced gas pumping through Ukraine on January 19 by 23%" - Gazprom

    Are the EU members getting it yet... all the gas that went to the EU is now going other places so when this conflict ends they wont be going back to cheap piped gas any more... the current gas situation is going to be the new normal because Russia will have other customers and when the EU wants more gas Russia might not have any excess gas to sell to them.

    The EU believed Russian gas had to go to the EU and by cutting off gas purchases they would damage Russia at several levels... loss of income from less sales, damaging their infrastructure by forcing them to stop production... which at that end of the process is not simply a case of turning off a tap... closing gas field run the risk that they might not be able to be started again... especially older fields...

    Well it is OK because the US gas can save you... except when you need it most on those cold dark winters... they will be using their own gas too and wanting more and will be in no position to sell any to Europe except at four or five times more than Americans pay for it and then Americans might miss out because it is more profitable to export it to Europe... of course that wont last long because some US president will pass a law forcing them to satisfy the domestic market before they are allowed to export... we know America now...
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    Post  Azi Fri Jan 20, 2023 3:02 pm

    kvs wrote:The gas from Russia should help them reduce the use of coal which has been causing insane air quality problems. It has also
    polluted China and the East China Sea with mercury. This region is the global hotspot for mercury and all of it is from coal
    Absolutely true!!!

    Every Watt generated with coal power plants generates twice the amount of Carbondioxide, compared with gas! The exhaust gases are also a problem and have to be filtered at great expense. Modern coal-fired power plants are very expensive...compared to old smokers. So general power generation is expensive with coal.

    Russian gas was a cheap and green stopgap for European industry... on the way to fusion power, which we're probably 30 to 50 years away from. By the way fusion energy also releases radiation, which is not as harmless as one might think.

    But the US war to de-industrialize Europe is in full swing! Perhaps in a few years we will return to horse-drawn carriages and torches.

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    Post  GarryB Fri Jan 20, 2023 10:23 pm

    Ironically the new Russian breeder reactors together with normal reactor types means they create a closed loop system where one reactor type can process waste from the other types and turn it into fuel to be reused, which means existing fuel resources will last thousands of times longer and waste is eliminated from the process... which makes it as good as fusion but available now.

    We have seen lots of accidents and problems at nuclear reactors and learned lots of lessons and made changes to make them safer.... the first few fusion reactors could be rather dangerous because of potential problems no one expected... fusion reactors run at millions of degrees C so the potential for problems is pretty clear... at such temperatures even water will explode (it will separate into oxygen and hydrogen and at that temperature no spark would be needed to detonate the gasses.)

    Ironically if their new fuel cell technology that uses hydrocarbon fuels can be perfected to allow the carbon to be extracted as a solid from the electricity generation process, then it would have an enormous impact on the world too, because solid carbon is valuable and used for carbon nanotubes and also carbon fibre, but it also means existing infrastructure and transport networks for the extraction and production and distribution of fossil fuels are all already in place... and on land or in the air or on top of the water you don't need to worry about tanks of pure oxygen like you do in a submarine... just atmospheric air could be used together with the fuel to generate electricity directly and the gas emissions will be steam... H2O, and solid carbon you could simply discard if you wanted to because it is not toxic... storing it all up in a carbon store would be useful... carbon fibre and carbon nanotubes would become much much cheaper and being a very useful material that would actually be amazing because it is light and strong and the source material would be enormously abundant as these fuel cells replace combustion engines everywhere.

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    Post  kvs Sat Jan 21, 2023 12:11 am

    Getting unoxidized carbon from any combustion involving O2 is not energetically feasible. Fuel cells are combustion even if they do not
    have a detonating flame. CH4 which is like the simplest hydrocarbon will yield CO under oxygen poor conditions and CO2 under more
    ideal conditions. Any more complex hydrocarbon will just involve more units involving C and H and lesser amounts of other elements
    such as sulfur.

    Sequestration of CO2 or decomposition into C and O2 costs energy. Burning CH4 is better than burning coal since less CO2 is produced
    per unit of energy extracted but if we care about too much CO2 being emitted, then nuclear power is the only viable solution. NATO
    dollar "greens" and their fetish for wind and solar are grifter quacks who are sending western countries over a cliff. These clowns think
    that whatever they do, it will work in their favour in the end. They do not have to think through their rackets. We see this clearly
    in NATzO's current proxy war against Russia.

    Wind and solar should be used for atmospheric processing of CO2 into either C or CH4. They can also be used to convert H2O into H2 and
    O2. Instead of pumping intermittent electricity into the grid, they could accumulate actual fuels that could be used effectively. But I
    do not see any such activity for wind and solar plants. They fixate on generating intermittent power subsidized by green BS policies.
    Germany is an example of how quickly all the deployment shuts down once the subsidies are cut off.

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    Post  GarryB Sat Jan 21, 2023 12:29 am

    Getting unoxidized carbon from any combustion involving O2 is not energetically feasible. Fuel cells are combustion even if they do not
    have a detonating flame.

    But that is the point... there is no combustion, there is no flame or fire involved.

    Liquid oxygen in a tank, diesel fuel in the fuel tanks of the sub and that is it... the diesel consisting of hydrogen atoms and carbon atoms... combustion in a diesel engine creates oxidised hydrogen... which is H2O, which is water... lots of heat... but no flame, and oxidised carbon in the form of carbon monoxide.

    A fuel cell has hydrogen atoms passing through a membrane with electrons passing around the outside creating an electrical current... carbon would not pass through the membrane and is deposited in solid form... no oxidation of the carbon so no carbon monoxide or carbon dioxide.

    Fuel cells are like batteries in the sense that they are based on a chemical reaction, but are like engines in that they consume fuel like an engine does.

    They are like batteries however because if you capture the results of the process you can reverse the process and add an electrical current and use that to get hydrogen and oxygen... so essentially it acts like a rechargeable battery in that sense.

    The problem with flaky sources of energy like wind and solar which are not reliable is energy storage and using hydrogen fuel cells is one way to use electrical current generated when the sun shines and the wind blows to convert water into hydrogen gas and oxygen if you want. They hydrogen gas is easier to capture because it is light and the oxygen can be extracted from the air in real time when needed so there is no real reason to capture it unless there are other reasons... operating in the Himalayas with solar panels and wind generators... I would think there is wind most of the time and plenty of water in liquid or frozen form, so being able to create hydrogen to generate power when the wind is not blowing and the sun in not shining would be useful but also gathering oxygen would also be useful at those altitudes where people with altitude sickness would benefit from a plentiful oxygen supply.

    Easier that laying electrical cables up there to the various bases for heating and lighting.

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    Post  Kiko Tue Jan 24, 2023 2:34 pm

    Russia boosts oil exports to India and China – Reuters, 01.24.2023.
    January shipments have surged due to growing Asia demand.

    Oil exports of Urals and Kazakhstan Export Blend Crude Oil (KEBCO) brands are expected to surge by 50% this month compared to December, due to growing demand in Asia and soaring global energy prices, Reuters reported on Tuesday.

    According to the outlet’s calculations and traders’ data, about 70% of Urals shipments set sail from the Baltic ports of Primorsk and Ust-Luga are heading to India. The world’s third-biggest oil consumer has remained Russia’s top importer of crude for several months, enjoying deep discounts offered by Moscow. In December, Russian exports to India surged to a five-month high, the outlet said.

    China, the second biggest buyer of Russian crude as of January, has also ramped up its imports in a sign of a recovery in demand after Covid restrictions were lifted in the country. Last year, Russia substantially boosted oil deliveries to China, overtaking Saudi Arabia – the country’s traditional top supplier. Crude shipments to China over the first 11 months of 2022 surged by 10.2% to reach 79.78 million tons.

    Oil supplies from Russia and Kazakhstan via the Baltic ports will amount to 7.1 million tons this month, representing the highest level since 2019, Reuters said, citing loading data. Some 300,000 tons of crude will be loaded on top of that to compensate for December delays, when the export plan was not completed.

    Russia loaded 4.7 million tons of Urals and KEBCO from Baltic ports last month, according to traders and Refinitiv tracking data.

    Following the imposition of Western sanctions last year, Kazakhstan renamed oil it exports using Russian ports from Urals to Kazakhstan Export Blend Crude Oil (KEBCO) to avoid the risk of becoming a target for restrictions and facing problems with financing.

    https://www.rt.com/business/570420-russian-oil-exports-india-china-surge/

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    Post  owais.usmani Thu Jan 26, 2023 7:40 am

    Russian Oil and Gas Industry: News #4 - Page 18 Firesh66

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    Post  Kiko Thu Jan 26, 2023 3:50 pm

    New Asian contracts to double Russian gas project's revenue – Reuters. 01.26.2023.
    Production of liquefied natural gas surged by as much as 10% last year, the operator of Sakhalin-2 says.

    The Sakhalin-2 liquefied natural gas (LNG) project is expected to generate twice as much revenue in 2023 compared to its earnings before the Ukraine-related sanctions rained down on Russia’s energy sector, Reuters reported on Thursday, citing industry analysts.

    The boost is attributed to long-term contracts with clients from the Asian region, along with higher global energy prices. 

    Renewed deals with Asian buyers are expected to secure demand for up to 6.5 million tons of the super-chilled fuel annually from Sakhalin 2, according to calculations by the agency and contractual volume data provided by the GIIGNL international group of LNG importers.

    The contracts could earn up to $4.5 billion in revenue for Sakhalin 2 shareholders, which include state-run energy giant Gazprom and Japanese companies Mitsubishi and Mitsui, according to Masanori Odaka, a senior analyst on Rystad Energy's gas and LNG team.

    The enterprise is expected to generate another $7.45 billion in 2023 if production remains in line with 2022, while its sales on the spot market are retained at 4.9 million tons, Alexei Kokin, chief analyst at Russia's Otkritie brokerage, told Reuters.

    On Thursday, Sakhalin Energy, the operator of the project, said it produced 11.5 million tons of LNG and some 3.7 million tons of its Sakhalin blend crude oil at the Sakhalin-2 facilities in 2022, exceeding its production plan. That is 10% more than the project produced in the previous year. 

    The company has managed to continue production despite “a period of unprecedented pressure from external factors on production and economic activity,” according to Andrey Oleinikov, Sakhalin Energy's managing director.

    According to the company’s statement, LNG and oil shipments in 2022 were delivered to the buyers on time in full compliance with the terms of Stock Purchase Agreement, while its production remained on schedule. The major markets for exports are Japan, China, South Korea and Indonesia, Sakhalin Energy said.

    https://www.rt.com/business/570503-lng-sakhalin-output-revenues-surge/

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    Post  GarryB Thu Jan 26, 2023 9:42 pm

    Good reward to those Japanese companies that didn't dump Russia over western sanctions...

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