GarryB Sat Oct 17, 2020 11:47 am
The prices are low because they sign very long term contracts... which is understandable if you are building a pipeline you need to know the customer will still be interested in your product in 10 years time because pipelines are only efficient if you use them quite a bit.
From the customers perspective they are locked into buying the product, which would be a negative if the provider was a
like the US who would use gas supplies as influence, but with Russia and the Soviet Union before hand the only problems they have ever had was when Ukraine was stealing gas sent to other customers down the line.
So cheap gas and the ability to pipe the gas immediately the cheque clears so to speak... once the money is in the accounts they flip a switch and the gas is immediately transmitted... no shipping no delays etc etc... what is not to like?
Apparently that is not good enough for Europe however.... US doesn't like it because they want to sell gas and cannot compete economically. Poland doesn't like it because gas comes via their pipes and they don't make any transit fees on gas coming through NSII or NSI for that matter.
As KVS says... the whole process is about getting cheap energy for Europe and they are biting and spitting on the hand that is trying to deliver that... I say start making outrageous demands and get the european countries to quit and then take ownership of the pipes built so far and complete them to Kaliningrad so they get the cheap gas that Germany might have had... they can convert the whole region into gas power...
To supply the EU market Russia can set up liquification plants in St Petersberg or Kaliningrad or both and ship it to Germany from those locations.... LNG costs more but that covers the cost of liquification and transport which the EU will then have to pay to get their energy... they can buy freedom gas but that will cost them even more...
By liquefying the gas themselves the Russians can send the energy to EU or US or UK or any other country on the planet.... they are no longer limited by the pipes either... where they reach and whose country they go through... countries on the way can't steal gas...
They can then offer to German companies that have heavy industry that uses a lot of energy to set up production in Russia where labour costs will be lower and energy costs also much lower...
but stable.