Posts Tagged ‘Gazprom’

Russia soon will be able to cut off Europe’s gas

April 14, 2022

Why is President Biden widening the economic war against Russia to include China? Why is he threatening to impose economic sanctions on countries who refuse to sanction Russia? Why is he raising the. stakes?

It may be because the United States is in a struggle for world power against not only Russia, but China, and that time is not on the side of the USA.

China’s Belt and Roads Initiative, also known as the New Silk Roads, is intended to bind together Russia, Iran and other nations in the interior of Eurasia by means of roads, railroads and oil and gas pipelines.

The result, if the Chinese can bring it off, would be a new entity that would be invulnerable to U.S. sea and power and that would be detached from the dollar-based world economy.

But that entity does not exist yet.  Specifically, there is a lack of sufficient gas pipelines to enable Russia to switch over the gas it is now selling to Europe and sell it to China instead.

Source: Seeking Alpha. (2020)

Source: S&P Global Commodity Insights (2019) Click to enlarge.

Source: Wood Mackenzie (2019) Click to enlarge.

Russia is rushing to build new pipelines that will connect its western and eastern Siberian gas fields and free it from the need to sell to European markets.   They’re scheduled to be completed in a few years, and then Russia will be in a position to cut off gas supplies to Europe.  

Pepe Escobar noted:

An absolutely key issue for Russia is how to make the transition to China as its key gas customer. It’s all about the Power of Siberia 2, a new 2600-km pipeline originating in the Russian Bovanenkovo and Kharasavey gas fields in Yamal, in northwest Siberia – which will reach full capacity only in 2024. And, first, the interconnector through Mongolia must be built – “we need 3 years to build this pipeline” – so everything will be in place only around 2025.

On the Yamal pipeline, “most of the gas goes to Asia. If the Europeans don’t buy anymore we can redirect.” And then there’s the Arctic LNG 2 project – which is even larger than Yamal: “the first phase should be finished soon, it’s 80 percent ready.” An extra problem may be posed by the Russian “Unfriendlies” in Asia: Japan and South Korea. LNG infrastructure produced in Russia still depends on foreign technologies.

It makes no economic sense for European nations, including Ukraine, to cut themselves off from Russian gas.  The U.S. plan is to substitute liquified natural gas (LNG) from the USA.  Ultimately the best solution would be to substitute renewable energy for gas heating.  But the physical infrastructure to do these things is not in place.

In fact, the ongoing mutually destructive economic warfare makes no sense for anyone, especially for the USA.  We the American people get no benefit from economic warfare against other nations.  We need to be rebuilding our own economy and preparing for the coming bad years.

LINKS

Sit back and watch Europe commit suicide by Pepe Escobar for The Cradle.

Gazprom Is Setting Up for Eurasian Gas Market Dominance by Zoltan Ban for Seeking Alpha (2020).

Russia is building a massive 50 billion cubic meter gas pipeline to China by Ameya Paleja for Interesting Engineering.

Russia said it’s pushing ahead with building a massive natural-gas pipeline to China by Grace Dean for Business Insider.

Russia, China agree on 30-year gas deal via new pipeline, to settle in euros, by Chen Aixhu for Reuters.

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Putin’s energy strategy for isolating Ukraine

July 6, 2015

Hat tip to Vineyard of the Saker.

Gazprom North StreamPresident Putin has made an agreement with Germany, and offered an agreement to Turkey, that will enable Russia to serve its natural gas markets in western Europe while retaining the option to shut off Ukraine, Poland and the Baltic states.

The Russian government plans to expand its North Stream pipeline across the Baltic Sea directly to Germany.   This would enable Russia to cut off natural gas to Ukraine and most of the rest of eastern Europe without interrupting its sales to western Europe.

Germany, which is now the financial hub of western Europe, would become the energy hub as well.

black_sea_turkey_south_streamRussia has an alternate plan, the South Stream, a pipeline to cross the Black Sea to Bulgaria, but this has been canceled.  Instead Russia now hopes to build a Turkish Stream, which would connect directly with European Turkey.  Greece and other European countries would have the option of connecting to that pipeline.

The Turkish government also has the ambition of becoming an energy hub.  It is in a good position to do this because of its position as the crossroads between Europe and the Greater Middle East.  But, for political reasons, Turkey might have to give up plans for other pipelines to connect to Iran, Iraq and Azerbaijan if goes along with Russia’s Turkish Stream.

Not everything that is announced gets built, and in any case construction of these pipelines would take several years.   But Putin’s strategy could put Russia in a powerful position in regard to Ukraine and NATO’s eastern flank, and without firing a shot.

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Russia turning down the gas on Europe

January 15, 2015

gas_to_eu_final_3

Russia cut natural gas shipments to Europe by 60 percent, and announced plans to eventually cut off shipments through Ukraine altogether.

The Urkainian route will be replaced with a new pipeline through Turkey, which will take a couple of years to build.  The European Union will need to build its own infrastructure to take the gas from the Greek border to the rest of Europe.

If the Europeans don’t get their new pipelines built in time, Russia will send its gas elsewhere, the head of Gazprom said.  Russia is working on gas deals not only with China, but with India.

Vladimir Putin is not a helpless victim of economic sanctions and falling oil prices.  He is willing and able to use Russia’s economic power to damage Ukraine and the European nations.

Nobody benefits from this cycle of tit-for-tat retaliation.  It’s an economic form of mutually assured destruction.

Russia Fires Ukraine as Natural Gas Transit for Europe by Michael Collins for Op-Ed News [added 1/16/2015]

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The foreign scene: November 4, 2014

November 4, 2014

EU unblocks ‘unprecedented levels’ of cash to secure gas for Ukraine on the EurActiv news site.  (Hat tip to Bill Harvey)

Ukraine Dips Into Dwindling Reserves to Pay Gazprom by Kenneth Rapoza for Forbes.

The International Monetary Fund will lend Ukraine the money needed to buy gas from Russia’s Gazprom, which will continue to sell gas to Ukraine at a subsidized rate.  This means Ukrainians, but European Union members who depend on Russian gas, will get safely through the winter.

It also means Ukraine will be in hock to the IMF, which will have to impose austerity on the Ukrainian people and sell off national assets, such as agricultural land, to pay back the IMF loan.  It is a win-win deal for everyone except the unfortunate Ukrainian people.

Dr. Adadevoh

Dr. Adadevoh

Doctor Stella Adadevoh Isolated Ebola Case, Stopped Nigaria Outbreak by Jonathan Cohn for The New Republic.

Nigeria is free of new Ebola outbreaks, and has been for more than six weeks.   This is an important accomplishment.  It would not have been the case except for a brave Nigerian physician, Dr. Stella Ameyo Adadevoh, who acted promptly to isolate an Ebola carrier and lost her own life to infection.

North Korea’s Gulags: a horror “without any parallel in the contemporary world” by Max Fisher for Vox.

The biggest CIA-drug money scandal you never read by Mark Ames for Pando Daily.