Russian Oil and Gas Industry: News #2

Russia’s Unexpected Advantage In The Oil Price War

x_54_u43 wrote:Whole reason USSR even wanted to buy foreign wheat was because they decided to try and match Americans in meat consumption(awful idea but honestly fitting for the rest of the USSR leadership such as Gorbie and co.)

GarryB wrote:Devalued currency makes imports more expensive (for no solid reason of course... it is not like you are paying more but getting better quality or improved products and raw materials), but also make domestic products more competitive both at home and on the international market...

When you buy food from your sworn enemies (whom you criticize for having inferior economic system) you should know that the jig is up

I mean, Russia only passed the USSR's life expectancy in 2010, twenty fucking years just to get back where they once were. What infuriates me is how solvable the problems were. I mean what is there that could not have been done under the USSR and maintained socioeconomic standards? What Gorbachev did was literally suicide on national level and Yeltsin was just pure treason.

Arctic gas finds new way from Yamal to China

PapaDragon wrote:
Pipe layer Akademik Cherskiy is currently off the coast of Madagascar en route to Port of Maputo, Mozambique

https://www.vesselfinder.com/vessels/AKADEMIK-CHERSKIY-IMO-8770261-MMSI-273399760

Is Gazprom’s LNG Megaproject Doomed To Fail?

The gas giant Gazprom is no longer in the spotlight after the US Treasury sanctioned Rosneft, the Russian national oil company, most probably triggering the collapse of the OPEC+ agreement and bringing about an unexpectedly low pricing environment for March 2020 within both the oil and gas segments. Having launched Power of Siberia to China, Gazprom is now intent on bringing Nord Stream-2 online before the end of the year, moving its own pipe-laying vessel from the Russian Far East to the Baltic region to deliver on all its major promises from the 2010s. Yet there is one project that has had significant problems starting up, combining in itself all the deficiencies of modern-day Russia.

The 13 mtpa Baltic LNG project was expected to be Gazprom’s response to the sudden rise of successful LNG projects led by rival NOVATEK. Signing a Memorandum of Understanding with Shell in 2016, with the aim of commissioning Baltic LNG in 2022, it seemed that everything is set for the project to succeed – the gas would have been supplied from the Unified Gas supply system (i.e. Russia’s central transmission grid as opposed to purpose-built liquefaction terminals with their own web of pipelines incoming from fields) and would be built right next to the point where Nord Stream-2 hits the Baltic Sea.

One of the main reasons why Gazprom teamed up with Shell was the Anglo-Dutch major’s LNG know-how, a boon for Gazprom with no experience operating large-scale liquefied gas assets. Among others, Shell designed the LNG technology for the Sakhalin-2 plant, and it was widely assumed that it could share some of its state-of-the-art technologies to develop Russian LNG. Yet when Gazprom announced that it would bring RusGazDobycha onboard, a low-profile company with a history of ties to Arkady Rotenberg (President Putin’s erstwhile judo partner and close confidant) with zero previous exposure to LNG technologies, Shell backed out of the project.

he fact that Rotenberg-owned structures are tied into Gazprom projects barely surprises anyone in Russia – they have been buying Gazprom subsidiaries since the mid-2000s, and most of the Gazprom’s pipelines are built by StroyGazMontazh. But in this specific case, the inclusion of RusGazDobycha came to the detriment of having Shell as a partner – as a consequence, Gazprom was forced to find another technological partner and it found one in the German engineering firm Linde. The two formed a JV in late 2019, on the back of Linde providing technological solutions for treating wet gas from Eastern Siberia to simultaneously supply the Chinese market with dry gas while creating new markets for helium, propane, butane and other compounds.

In and of itself, bringing in a new partner and losing the other need not necessarily result in an unfavorable balance, yet Baltic LNG’s cost started to increase exponentially as the declared aims grew in ambition and scope. Russian media outlets have reported that building the LNG liquefaction complex and the petrochemical plant would cost a total of approximately $26 billion, however, these costs do not cover the expenses for building the seaport and other associated infrastructure. As it turns out, the shareholders still have no view on where the LNG terminal will be built - in the end, they might opt to have the terminal built next to an already functioning LPG terminal.

But even with this in mind, additional expenses are almost guaranteed – primarily massive storage capacities. Fed from the federal trunk pipeline which is in maintenance at least once a year for a prolonged period, Baltic LNG would need a substantial amount of storage to weather situations like these. Moreover, it would be politic if Baltic LNG had a dedicated resource base to have it supplied from, and not to compete with, Gazprom’s pipeline supplies to Europe. Since Baltic LNG would need to be fed from fields that are relatively close to the existing transmission infrastructure, one of the assumed feedstocks for the project was the Achim 4 and 5 formations at Gazprom’s legacy Urengoy field in Western Siberia. Yet the talks with OMV, the Austrian oil and gas company, have so far failed to materialize in a clinched deal over discrepancies regarding the $1 billion price tag for the 25-percent stake.

The end result of Gazprom’s long-mooted LNG revolution, as of March 2020, is as following: instead of a 2022 commissioning, the envisaged date to bring Baltic LNG onstream is 2025. And instead of the initial price tag of some $10 billion, the current cost tally would amount to some $28-29 billion. Truth be told, initial plans called for an LNG terminal on the Baltic coast, while right now Baltic LNG comprises the terminal itself, a 45 BCm per year gas processing plant that would partially feed Nord Stream-2 and allow for separate LPG and ethane export streams from Ust-Luga. One struggle to rid itself of the impression that the grandeur of Baltic LNG would still leave Gazprom in an incomparably minor position compared to the prime Russian LNG supplier, NOVATEK.

PapaDragon wrote:

Update: passed the Namibia/Angola border

This ship is fun to follow

Nauticor and Novatek to co-develop small scale LNG supply in the Baltic Sea

Nauticor GmbH & Co. KG and Novatek Green Energy Sp. o. o have signed a Letter of Intent (LOI) regarding the cooperation in developing a joint LNG supply infrastructure in the Baltic Sea range.

Through this cooperation the two companies aim to further develop the marine LNG bunkering market by delivering via both bunker vessels and trucks. Special focus is placed on the development of such infrastructure in ports along the German Baltic Sea coast.

Both companies are already active market players in the North European LNG market and see significant potential for further growth by joining forces. Novatek has remarkable LNG production capacities in Yamal and Vysotsk which would be suitable to satisfy the growing demand from shipping, logistics and industry for alternative fuels in Central and Western Europe.

Gregoire Hartig, Senior Business Development Manager of Nauticor, is convinced that “this cooperation combining the strengths of a leading marine LNG provider with those of one of the world’s largest LNG producers will benefit those companies that chose using LNG as fuel as it is improving the availability of LNG in a growing number of locations. The commitment of a strong player like Novatek, to support the development of small scale LNG infrastructure in the Baltic Sea and beyond, underlines Nauticor’s efforts to develop the last mile of the LNG supply chain from the terminal to the end-customer. The Rostock LNG terminal is obviously an important addition to that and a natural starting point for such a cooperation.”