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Overbom

Brigadier
Registered Member
gelgoog said:
Alexey Miller, the Gazprom CEO, is hyperventilating. Power of Siberia, even when it gets to full capacity, is roughly equivalent to the Nord Stream pipeline. Europe also consumed gas from the Yamal pipeline over Poland and the pipelines over Ukraine like the Brotherhood pipeline. Gazprom has lost a huge amount of foreign sales which cannot be covered by Power of Siberia alone.
Then there is the fact that the gas which used to be sold to Europe came from the deposits in the Yamal peninsula in the Arctic, while Power of Siberia uses gas from the Far East in Siberia. Right now, most of the gas that used to be sold to Europe has nowhere to go. Russia has been selling it to neighbouring countries like Azerbaijan, Kazkhstan, etc but they cannot replace European demand.
In the long term to sell the Yamal gas to China will require the construction of the Power of Siberia 2 pipeline and Arctic LNG 2 facilities.
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China knows that it has very strong hand and is most likely pushing for big discounts.

Russia is resisting this. Dunno what they are waiting though because with each passing day China's hand on this negotiation gets stronger and stronger while Russia's weakens.

For certain, I wouldn't want to be in Russia's shoes trying to negotiate such a deal. At this point you might as well as take the L and move as fast as possible on construction of the facilities and infrastructure. These things take a long time to be done even after the deal is signed
 
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gelgoog

Lieutenant General
Registered Member
Overbom said:
China knows that it has very strong hand and is most likely pushing for big discounts.
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That is just the Western "doom and gloom" argument exposed by publications like FT and the Economist. The truth is China has been paying more to the Russians for each cubic meter of gas via Power of Siberia than the Germans were paying for Nord Stream gas. This is cost effective for China because, even at those prices, the Russian gas is much cheaper than either sea transported LNG, or gas from Turkmenistan which needs to travel long distances via huge expensive pipeline networks inside China to reach the cities in the coast. The Russian gas from Power of Siberia is supplied close to the major heavy industry centers in Northern China aka the "rust belt" and Beijing and requires minimal upkeep and construction of pipelines inside China in comparison. So it is much more valuable than either LNG or Turkmenistan gas in that area. It will also be competitive, although less so, with other supplies even for sales to Shanghai area. Because Russia is paying for the costs of the construction of the pipelines inside Russia by themselves, while China had to pay for the construction of the pipelines in Central Asia. Which are also much longer. LNG is much more expensive than piped gas. It is just plain economics of the thing. Ship based transport is less cost effective. You lose energy by liquefying and gasifying the natural gas. You lose energy by transporting it by ship over huge distances.

Overbom said:
Russia is resisting this. Dunno what they are waiting though because with each passing day China's hand on this negotiation gets stronger and stronger while Russia's weakens.
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I think a lot of the arguments around this are also BS. The fact is the Russians cannot start construction of the pipeline yet since the route hasn't been properly surveyed and decided upon. They are still doing detailed land surveys in Mongolia. And China cannot just switch their energy consumption from coal to natural gas in Northern China at the flip of a switch. It will take many years to convert energy from coal to gas. It requires changing boilers in houses and neighborhoods for heating from coal or oil to gas, making new gas powered power stations to replace polluting coal power stations near urban environments, switching industries to burn gas instead of coal, etc. In the long term the Chinese government will push society to do this to reduce carbon pollution from coal use in Northern China. But it will take significant effort.

Overbom said:
For certain, I wouldn't want to be in Russia's shoes trying to negotiate such a deal. At this point you might as well as take the L and move as fast as possible on construction of the facilities and infrastructure. These things take a long time to be done even after the deal is signed
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There is no point in building a pipeline direct to China if there is no demand for the gas inside China proper. Northern China is still heavily reliant on coal for energy use and it will take time to make the transition.
 
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aqh

Junior Member
Registered Member
With the Ukraine and Israel situation and the US willing to give half its military to satisfy certain very powerful lobbies. They are literally setting their military back years. Due to a law passed the US defence budget can't rise as America is gaining new debt (look at FRA act). This is a big boon for the PLA. In 2029 we will be looking back at this time as a really good event for the PLA in the same way the Iraq war is seen.
 
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pmc

Major
Registered Member
gelgoog said:
Alexey Miller, the Gazprom CEO, is hyperventilating. Power of Siberia, even when it gets to full capacity, is roughly equivalent to the Nord Stream pipeline. Europe also consumed gas from the Yamal pipeline over Poland and the pipelines over Ukraine like the Brotherhood pipeline. Gazprom has lost a huge amount of foreign sales which cannot be covered by Power of Siberia alone.
Then there is the fact that the Russian gas which used to be sold to Europe came from the deposits in the Yamal peninsula in the Arctic, while Power of Siberia uses gas from different deposits in the Far East in Siberia. Right now, most of the Yamal and Urals gas that used to be sold to Europe has nowhere to go. Russia has been selling it to neighboring countries like Azerbaijan, Kazkhstan, etc but they cannot replace European demand.
In the long term to sell the Yamal gas to China will require the construction of the Power of Siberia 2 pipeline and Arctic LNG 2 facilities.
Click to expand...
This translation error or some thing. He said Pipeline Gas to Western Europe. Western Europe is only Germany. who at best of time was 48bcm The rest are Central/Eastern like Austria/ Hungry or Turkey. Russia also has integrated alot its energy structure with other CIS countries. and when you look around Russian energy system is in Chinese interest. Arabs will recoup there investment losses by maintaining high prices.
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this statement on the Rossiya 1 TV channel. “Only pipeline supplies to China in the very near future can reach the level of supply volumes that we had for export to Western Europe,” Miller said in particular. He did not specify the volume of supplies and the timing in which this could happen.
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see how big is Saudi premium over the bench mark. they have alot of influence on Africa and rest to bring price in line with them and this is highly likely they will maintain most of prices in dollar. there currencies are dollar pegged which they will loathed to break as they are far more depended on Boeing.
https://twitter.com/i/web/status/1709933758609264860
 
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gelgoog

Lieutenant General
Registered Member
pmc said:
This translation error or some thing. He said Pipeline Gas to Western Europe. Western Europe is only Germany. who at best of time was 48bcm The rest are Central/Eastern like Austria/ Hungry or Turkey. Russia also has integrated alot its energy structure with other CIS countries. and when you look around Russian energy system is in Chinese interest.
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The argument is still disingenuous. Italy and Germany also got a substantial amount of gas via the pipelines coming from Ukraine and Poland. Not just the other smaller countries like Austria, Hungary, the Czech Republic, Slovakia, etc. In fact originally all gas sold to Germany came from the pipelines over Ukraine. The newer pipelines were built because as the supply of gas from the Urals became more depleted the new supplies in the Arctic in the Yamal Peninsula were better served by a new shorter pipeline further to the north. And then there is the fact by cutting out the middlemen the Russians could get a larger slice of the pie for themselves, and sell gas cheaper to the final customers even. Back when the pipelines over Ukraine were originally built they were still part of the USSR so that wasn't as much of an issue.
 
B

Biscuits

Major
Registered Member
aqh said:
With the Ukraine and Israel situation and the US willing to give half its military to satisfy certain very powerful lobbies. They are literally setting their military back years. Due to a law passed the US defence budget can't rise as America is gaining new debt (look at FRA act). This is a big boon for the PLA. In 2029 we will be looking back at this time as a really good event for the PLA in the same way the Iraq war is seen.
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Probably even more so, because while Iraq was an US victory against their own rebellious colony, the upcoming wars will be Chinese proxy victory against US proxy.
 
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