Xi Jinping provides Putin lifeline with 30-year gas deal after Germany Scholz cuts Nord Stream 2

[beijingwalker]

Xi Jinping provides Putin lifeline with 30-year gas deal after Germany Scholz cuts Nord Stream 2​

CHINESE PREMIER Xi Jinping may have handed Vladimir Putin a lifeline as the countries sign a major gas deal that could undermine western sanctions.​

By ANTONY ASHKENAZ
15:45, Tue, Feb 22, 2022 | UPDATED: 15:47, Tue, Feb 22, 2022

Western powers imposed fresh sanctions on Russia as last night Russian President Vladimir Putin ordered Russian troops into Donetsk and Luhansk in Ukraine after declaring them as independent entities. Russian military vehicles have been spotted rolling into the Ukrainian city of Donetsk shortly after Mr Putin ordered troops to conduct a "peacekeeping mission", reports claim.

Amid the sanctions imposed by the US and UK, German chancellor Olaf Scholz ordered the withdrawal of a key document needed for certification of the Nord Stream 2 gas pipeline.

The pipeline would have sent Russian gas to Germany, bypassing Ukraine and Poland on the route through the Baltic Sea.

However, experts now warn that Mr Putin may be handed a lifeline that will lessen the impact of the sanctions he now faces in Europe and North America.

Earlier this month, Russia agreed on a 30-year contract to supply gas to China via a new pipeline.

According to industry officials in Beijing, the Russian state-backed oil corporation Gazprom, which has a monopoly on Russian gas exports by pipeline, agreed to supply Chinese state energy major CNPC with 10 billion cubic metres of gas a year.

Danil Bochkov, an expert on Russia, Europe and China said that this deal would be very useful for Mr Putin in the face of these sanctions.

He said: “So now, Russia- China recently concluded gas and oil projects which would elevate Russia to #1 supplier of China by 2050 come in extremely handy.”

Earlier he noted: “New gas and oil projects serve as testimony to the growing Russia-China energy alliance since they are expected to make Russia [the] biggest gas supplier to China.

“While 25 per cent of all oil produced by the Russian state-owned energy giant Rosneft will now go to China.”

Russia already pumps gas to China through its Power of Siberia pipeline, which began the flow of energy in 2019, and by shipping liquefied natural gas (LNG).

Last year, it exported 16.5 billion cubic metres (bcm) of gas to China.

Mr Bochkov warned that this new alliance “signifies that the future of global politics will be driven by the ideological competition for the role of prime architect of a new world order, with Moscow and Beijing already keen to co-produce the blueprints.”

Map of the Nord Stream 2 pipeline (Image: Stefan Sauer/ DPA/ PA Images)

Meanwhile, various Western powers have promised sanctions against Russia.

European Commission President Ursula Von der Leyen has warned of “massive economic sanctions”.

US President Joe Biden of “severe consequences” and Prime Minister Boris Johnson of sanctions to "individuals and companies of strategic importance to the Russian state".

But Brandon Weichert, a geopolitical analyst told Express.co.uk that China can provide relief from sanctions as the pair now have close ties.

He also made clear that Russia’s status as an “energy superpower” may make it immune to certain sanctions.

Xi Jinping provides lifeline to Putin with 30-year gas deal

CHINESE PREMIER Xi Jinping may have handed Vladimir Putin a lifeline as the countries sign a major gas deal that could undermine western sanctions.

www.express.co.uk

 

[beijingwalker]

Europe Faces Harsh Reality of Finding Russian Gas Irreplaceable​

• Diverting LNG may spread crisis to Asia: BCS Global Markets
• Russia can’t be replaced by one supplier unilaterally: Qatar

ByAnna Shiryaevskaya
and Isis Almeida
February 2, 2022, 5:52 PM GMT+8

Energy-rich countries from Qatar to Azerbaijan have all pledged emergency gas supplies to Europe, but the region is quickly figuring out it can’t replace top supplier Russia.

Ongoing tensions over Ukraine and the threat of a potential conflict interrupting energy flows to Europe have overshadowed the continent’s gas market in recent weeks, causing volatile price swings. War could interfere with the massive volumes that Russia sends to the continent, about a third of which come through Ukraine.

To mitigate the risk of supply disruption, the European Union is speaking with major producers, seeking partnerships and even potential fuel swaps with Asia, where the market is twice the size of the bloc’s. Recent arrivals of liquefied natural gas have helped to ease tightness, as has mild weather, but Europe relies on Russia for more than a third of the gas it uses, and sourcing that fuel from elsewhere could spread the crisis to other regions.

“Europe has no alternative to Russian gas,” said BCS Global Markets Senior Analyst Ron Smith. “You would have to divert half of the LNG that Asia consumes in order to replace Gazprom PJSC. And what would that mean? That would mean massive energy shortages all across Asia, you would export Europe’s energy crisis to Asia.”

Supply Diversions​

The volume of gas the EU needs can’t be replaced by any one supplier unilaterally without disturbing deliveries to other regions, Qatar’s energy minister Saad Al-Kaabi said Tuesday after a call with the bloc’s Commissioner for Energy Kadri Simson.

He added that Doha’s supply contracts are “sacrosanct in Qatar,” and the nation’s priority is to fulfill the needs of its existing customers first. Guaranteeing Europe’s energy security will require a collective effort from a number of different suppliers, he said.

For any prolonged disruption lasting through next two winters, Europe would have to curb demand, researchers at the Brussels-based Bruegel think tank said in a blog. And that uncertainty is likely to keep prices high as competition for LNG intensifies.

“As long as the situation in Ukraine is unclear and unresolved, European buyers will be willing to pay enough to attract flexible LNG cargoes to make sure inventories do not run dry,” said Oystein Kalleklev, chief executive officer of LNG shipowner Flex LNG Ltd.

Because gas infrastructure is expensive, most of the world’s volumes are typically sold under long-term contracts between sellers and buyers. Flexible deliveries from the U.S. could help, but only if the price is right.


The U.S. was the biggest LNG supplier to Europe last month and, together with other nations, helped displace Russian gas supply by a few percentage points in January, according to senior European Commission officials.

But that isn’t guaranteed to last. Europe has been the most profitable region to send the super-chilled fuel to since the end of last year but usually it’s Asia, the world’s fastest-growing market. If China’s appetite for gas re-awakens, tankers will be quick to abandon Europe and head eastward.

Filling the Gap​

Meanwhile, Gazprom’s daily gas exports via pipeline plunged to its most important markets in January, to the lowest since early 2015, despite the company producing more of the fuel.

On the EU’s radar is also Azerbaijan, the Caspian nation that started sending gas to Europe at the end of 2020. Its deliveries to Europe, Turkey and Georgia are about a 10th of volumes Gazprom sells to its main export markets, and that supply was pre-sold almost a decade ago to help finance production and pipelines.

“Reality is Azerbaijan is not a competitor to Russian gas simply because of the volumes,” Elin Suleymanov, the nation’s ambassador to the U.K., said in an interview last week. “We could help with some deliveries but Azerbaijan volumes are not equal to the Russian volumes, that’s obvious. That’s something which also needs to be thought of by our Western partners.”

For now, Europe relies on the LNG that’s been arriving at its shores, helping to ease high prices. By May, Asia is set to regain its spot as a premium export market for U.S. cargoes of the fuel, according to BloombergNEF calculations.

“This idea that ‘we will fill the gap with LNG’, no, you can’t. It’s physically impossible to do, there’s not enough LNG in the world to do that,” Smith said.

Europe Faces Harsh Reality of Finding Russian Gas Irreplaceable

Energy-rich countries from Qatar to Azerbaijan have all pledged emergency gas supplies to Europe, but the region is quickly figuring out it can’t replace top supplier Russia.

www.bloomberg.com

 

[beijingwalker]

Europe Faces Harsh Reality of Finding Russian Gas Irreplaceable​

• Diverting LNG may spread crisis to Asia: BCS Global Markets
• Russia can’t be replaced by one supplier unilaterally: Qatar

ByAnna Shiryaevskaya
and Isis Almeida
February 2, 2022, 5:52 PM GMT+8

Energy-rich countries from Qatar to Azerbaijan have all pledged emergency gas supplies to Europe, but the region is quickly figuring out it can’t replace top supplier Russia.

Ongoing tensions over Ukraine and the threat of a potential conflict interrupting energy flows to Europe have overshadowed the continent’s gas market in recent weeks, causing volatile price swings. War could interfere with the massive volumes that Russia sends to the continent, about a third of which come through Ukraine.

To mitigate the risk of supply disruption, the European Union is speaking with major producers, seeking partnerships and even potential fuel swaps with Asia, where the market is twice the size of the bloc’s. Recent arrivals of liquefied natural gas have helped to ease tightness, as has mild weather, but Europe relies on Russia for more than a third of the gas it uses, and sourcing that fuel from elsewhere could spread the crisis to other regions.

“Europe has no alternative to Russian gas,” said BCS Global Markets Senior Analyst Ron Smith. “You would have to divert half of the LNG that Asia consumes in order to replace Gazprom PJSC. And what would that mean? That would mean massive energy shortages all across Asia, you would export Europe’s energy crisis to Asia.”

Supply Diversions​

The volume of gas the EU needs can’t be replaced by any one supplier unilaterally without disturbing deliveries to other regions, Qatar’s energy minister Saad Al-Kaabi said Tuesday after a call with the bloc’s Commissioner for Energy Kadri Simson.

He added that Doha’s supply contracts are “sacrosanct in Qatar,” and the nation’s priority is to fulfill the needs of its existing customers first. Guaranteeing Europe’s energy security will require a collective effort from a number of different suppliers, he said.

For any prolonged disruption lasting through next two winters, Europe would have to curb demand, researchers at the Brussels-based Bruegel think tank said in a blog. And that uncertainty is likely to keep prices high as competition for LNG intensifies.

“As long as the situation in Ukraine is unclear and unresolved, European buyers will be willing to pay enough to attract flexible LNG cargoes to make sure inventories do not run dry,” said Oystein Kalleklev, chief executive officer of LNG shipowner Flex LNG Ltd.

Because gas infrastructure is expensive, most of the world’s volumes are typically sold under long-term contracts between sellers and buyers. Flexible deliveries from the U.S. could help, but only if the price is right.


The U.S. was the biggest LNG supplier to Europe last month and, together with other nations, helped displace Russian gas supply by a few percentage points in January, according to senior European Commission officials.

But that isn’t guaranteed to last. Europe has been the most profitable region to send the super-chilled fuel to since the end of last year but usually it’s Asia, the world’s fastest-growing market. If China’s appetite for gas re-awakens, tankers will be quick to abandon Europe and head eastward.

Filling the Gap​

Meanwhile, Gazprom’s daily gas exports via pipeline plunged to its most important markets in January, to the lowest since early 2015, despite the company producing more of the fuel.

On the EU’s radar is also Azerbaijan, the Caspian nation that started sending gas to Europe at the end of 2020. Its deliveries to Europe, Turkey and Georgia are about a 10th of volumes Gazprom sells to its main export markets, and that supply was pre-sold almost a decade ago to help finance production and pipelines.

“Reality is Azerbaijan is not a competitor to Russian gas simply because of the volumes,” Elin Suleymanov, the nation’s ambassador to the U.K., said in an interview last week. “We could help with some deliveries but Azerbaijan volumes are not equal to the Russian volumes, that’s obvious. That’s something which also needs to be thought of by our Western partners.”

For now, Europe relies on the LNG that’s been arriving at its shores, helping to ease high prices. By May, Asia is set to regain its spot as a premium export market for U.S. cargoes of the fuel, according to BloombergNEF calculations.

“This idea that ‘we will fill the gap with LNG’, no, you can’t. It’s physically impossible to do, there’s not enough LNG in the world to do that,” Smith said.

Bloomberg - Are you a robot?

 

[AZMwi]

Pakistan should also grab this opportunity to address its energy crisis and make a gas pipeline deal with russia

 

[American Pakistani]

How about a Sino Pak stream?

 

[MuslimRAJPUT]

Pakistan should also grab this opportunity to address its energy crisis and make a gas pipeline deal with russia

TAPI is on agenda on upcoming visit to Russia.

 

[beijingwalker]

EU is not sanctioning Russia, it's sanctioning itself. Without sufficient energy support, the future economy growth looks very gloomy for Europe.

 

[Isotope]

When elephants fight, it's the grass that suffers.

 

[Beidou2020]

EU is not sanctioning Russia, it's sanctioning itself. Without sufficient energy support, the future economy growth looks very gloomy for Europe.

This is a great opportunity to bury the EU permanently into the dustbin of history. Germany can be crushed with high energy prices which will decimate its industry. Without German industry, EU is a decrepit cesspool of lazy indisciplined people.

Must take full advantage of this crisis to remove a major global competitor to China.

Never let a crisis go to waste.

 

[Asian.Century]

As of now. Russia has not stopped gas to Europe though!

 

[zartosht]

The west is showing all their cards and throwing every economic bomb they have at the Russians.

Once Russia and China Adjust to this, and form alternatives. It will make China much better equipped to handle such economic warfare. This will make the re-taking of Taiwan far less costly for China.

China has to ensure that Russia succeeds, if it is serious about taking Taiwan back by force.

 

[War Thunder]

As of now. Russia has not stopped gas to Europe though!

Why would they do that?

 

[casual]

This is a great opportunity to bury the EU permanently into the dustbin of history. Germany can be crushed with high energy prices which will decimate its industry. Without German industry, EU is a decrepit cesspool of lazy indisciplined people.

Must take full advantage of this crisis to remove a major global competitor to China.

Never let a crisis go to waste.

Germany isn't dumb enough to stop buying Russian energy.

 

[Shotgunner51]

Germany isn't dumb enough to stop buying Russian energy.

They won't stop, but the Yamal-Europe pipeline has halted all westbound gas supplies since last Friday, gas price in Europe now has skyrocketed to above $600 equivalent barrel of oil.

Russia's Yamal-Europe westbound gas pipeline flows stopped on Friday

Westbound natural gas flows through the Yamal-Europe pipeline stopped on Friday while Gazprom's bids for additional transit capacity via Ukraine stand at high levels, data from pipeline operators shows.

www.reuters.com

Gas Prices In Europe Skyrocket Again As Supply Risks Grow

Natural gas prices in Europe continued to break records, with prices at the Dutch TTF hub now nearing the equivalent of $600 per barrel of oil

finance.yahoo.com

 

[casual]

They won't stop, but the Yamal-Europe pipeline has halted all westbound gas supplies since last Friday, gas price in Europe now has skyrocketed to above $600 equivalent barrel of oil.

Russia's Yamal-Europe westbound gas pipeline flows stopped on Friday

Westbound natural gas flows through the Yamal-Europe pipeline stopped on Friday while Gazprom's bids for additional transit capacity via Ukraine stand at high levels, data from pipeline operators shows.

www.reuters.com

Gas Prices In Europe Skyrocket Again As Supply Risks Grow

Natural gas prices in Europe continued to break records, with prices at the Dutch TTF hub now nearing the equivalent of $600 per barrel of oil

finance.yahoo.com

It'll be interesting to see what Europe uses to pay for Russian energy going forward. With the West freezing Russian reserve dollar and euro accounts, those currencies are no good anymore. RMB most likely solution.