Must develop the supply lines to Central Asia. Russia is reliable alright but the Russian government and its long term prospects aren't. Sure hope Putin got the next leaders well groomed and adept.
Chinese Economics Thread
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The audacity.
Currency devaluation mean burdening Chinese poor and Middle class and stealing money from their hard earned income.
One of the reasons why Japan agreed to the Plaza accord was, by admission of BOJ honchos themselves, that Japan was too dependent on US for its security and stability and Japan "owed" US.
China and Japan are two very different countries. Miles apart.
Possibly Jan crunch in LNG means we start off 2022 with another bout of inflation. Germany cancelled NordStream 2 which means spot prices will trend higher for a few years. Qatar will benefit nicely as a major gas exporter. Russia could see itself marketing more LNG to South Asia and Southeast Asia with opening up of Sri Lanka, Cambodia and Myanmar to LNG imports.
As for China, it will probably negotiate bigger volumes for Power of Siberia and from Central Asia to stabilize prices and supply.
But it's just nasty. 2022 is going to be rough.
Since the pipelines can carry only a finite volume, how can China push for bigger volumes?
The pipelines would have to be carrying gas seasonally and/or not fully utilizing its volumes usually to afford a volume increase. Is this the case?
The pipelines don't run at full capacity usually and volume can be expanded.
Power of Siberia 2 price contract has not been worked out yet. Power of Siberia will outstrip Central Asian gas and LNG to become the largest source of natural gas for China and a price stabilizer esp with how energy hungry China is.
"China's gas demand will grow rapidly and could double in the next 15 years," Gazprom CEO said.
Even with Power of Siberia I and II there would still be plenty spare Chinese demand for Russian pipelined gas.
Power of Siberia I has about the same capacity to China as Nord Stream does to Germany.
It has less capacity than all the pipelines from Central Asia to China combined. There are lots of those and some were put into service just recently. Its main advantage is it connects directly to northern China which previously was under served with gas.
Power of Siberia I is still ramping up capacity as it uses new gas fields in East Siberia which are still under development. Still, increasing production to 12 bcm this year from 4 bcm past year is quite a ramp up.
It has less capacity than all the pipelines from Central Asia to China combined. There are lots of those and some were put into service just recently. Its main advantage is it connects directly to northern China which previously was under served with gas.
Power of Siberia I is still ramping up capacity as it uses new gas fields in East Siberia which are still under development. Still, increasing production to 12 bcm this year from 4 bcm past year is quite a ramp up.
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The rmb will go up by 5% per year soon.
Russia is very good in implementing complex construction projects in harsh climates.
All those Chinese trains and trucks that goes to Europe it is through Russian built infrastructure. Russia alone is developing North Sea route that will connect Asia and Europe through Arctic.
To give you the scale of construction. This one project that cost $500b a decade ago. Russia alone is now implementing it.
Indeed. As I said, Russia and China are neighbours and must live with each other. And Russian resources will always find their way to China. It makes so much sense.
However, Russian politics can't be said to be that reliable. We are seeing in real time how certain adversaries are fomenting Political troubles in Russia by supporting anti-establishment elements like Navalny. Russia is still a democracy which has elections and what happens when a pro-west person pulls a win? What happens when a future leader is very Anti-China?