Russian Oil and Gas Industry: News #3

The situation with SP-2 on March 18. Fortune has set a new record
Yesterday

Despite the sharp aggravation of US-Russian relations, the construction of Nord Stream 2 continues as usual. We made the previous update on March 11th. Now, a week later, we can confidently state: Fortune not only did not slow down, but also set another record.

But first things first

So, as of the morning of March 11, Fortuna laid down a fifth of the first string of Nord Stream 2 . Namely, 14 kilometers. During this time, the pace was as follows:

March 15: +1002 meters
March 16: +1119 meters
March 17: +1117 meters

Between March 11-14, Fortuna threw down the pipe and stood idle for several days. The reason is banal - bad weather. However, the pace was impressive in the days that followed. Moreover, Fortuna set a record, having laid 1119 metro c. The previous record was 991 meters per day.

Unfortunately, weather conditions continue to get in the way of Fortune. Since the barge is flat-bottomed, it is very sensitive to wind gusts and wave heights. Therefore, when the weather changes, Fortune throws the pipe into the sea.

Such problems should not arise with Academician Chersky . The maximum is a slowdown in the pace, but not a complete cessation of work. But let's finish with Fortuna.

As of the morning, Fortuna had laid 17.25 kilometers along the first line of Nord Stream 2. This is about a third of its total length. Fortune covered such a distance in a month. Roughly speaking, it will take two months to complete the work on the first line. However, this will most likely happen earlier - by the end of April.

There are two reasons. First, the weather in the Baltic will improve. The season of storms has come to an end. Accordingly, if Fortuna is idle for days, it is rare.

Secondly, since the beginning of the work , Fortune has been gradually gaining momentum. Initially, it was laid at 300-400-600 meters. Now, as we can see, more than one kilometer passes per day. Therefore, the average speed will definitely increase.

Now we turn to Academician Chersky . The pipelayer continues to be tested near Kaliningrad. Within ten days, he must complete them and embark on the second branch of Nord Stream-2. Its total length is 85 kilometers. However, firstly, Chersky's speed is higher than that of Fortuna (about 1.5 kilometers per day). Second, as in the first case, the storm season has come to an end, which opens up the opportunity for Chersky to work at full capacity.

It will take about two months for Academician Chersky to lay the second line . Of course, such an option is possible in which Fortuna, having finished work at the end of April, will switch to the second line from the German side. But that doesn't make much sense. The savings will be obtained in a few days.

Thus, if all work on Nord Stream 2 is completed by June 1, Nord Stream 2 will have a comfortable lead in time before the parliamentary elections to the Bundestag. This is 3-4 months, during which it is more than realistic to carry out all certification and commissioning works on the gas pipeline.

Overall, the news is very positive. The only incomprehensible moment remains with the permission to work in German waters. As we remember, in January, environmentalists who suddenly emerged filed a complaint, in connection with which Berlin temporarily revoked the permit. But I think it won't be a big problem.

https://zen.yandex.ru/media/dvinsky_club/situaciia-s-sp2-na-18-marta-fortuna-ustanovila-novyi-rekord-6053187a3eb67941684c1e5e?&disable_feed_under_article=false

Good that they are buying more oil from a democracy and not this middle eastern dictatorships.

Despite several packages of US sanctions, Nord Stream 2 pipeline will ‘unequivocally’ be finished in 2021, says Gazprom chairman, by Jonny Tickle for RT News.

After a series of delays caused by sanctions imposed by Washington, construction of the controversial Nord Stream 2 gas pipeline will be completed before the end of year, according to the chairman of Russian energy giant Gazprom.

Speaking to journalists in Berlin, Viktor Zubkov explained that construction is "90-92%" complete. Zubkov is Russia's former Prime Minister, having served two stints in 2007-2008 and 2012.

"This year, unequivocally, it will be finished," he stated, as quoted by news agency TASS. "It's a pity about the lost time, but that's the way it happened."

His comments come just two days after US Secretary of State Antony Blinken told his German counterpart, Heiko Maas, that Washington would continue to oppose the construction of the pipeline. Berlin has shown no sign of bowing to American pressure.

Nord Stream 2 will connect Germany directly to Russia via the Baltic Sea. It is aimed at protecting Berlin's energy security and making the process less reliant on third countries transiting gas, also lowering the price. Much of Europe's energy comes from Russia via Ukraine, and Kiev receives hefty fees for pipeline usage.

Its completion has been delayed significantly by resistance from the United States. Washington has imposed numerous packages of sanctions against companies involved in the construction, maintenance, insurance and certification of the pipeline, leading some to pull out altogether.

Earlier this year, the US Treasury Department expanded its measures against Nord Stream 2, with the Countering America's Adversaries Through Sanctions Act (CAATSA), which placed pipe-laying vessel Fortuna under financial restrictions.

According to Washington, the project will "undermine Europe's overall energy security and stability." However, some have accused the Americans of opposing the pipeline for economic reasons, as the country looks to increase its exports of Liquified Natural Gas (LNG) to the continent.

Last year, Russian President Vladimir Putin said that US sanctions are aimed entirely at protecting America's ability to sell LNG to Europe, disguised as a foreign policy goal to protect Ukraine.

"If sanctions remain, it means only one motive," Putin said. "They are securing a market for their products, exclusively in their own selfish interests, and at the expense of European consumers."

According to online publication Politico Europe, there is a similar feeling in Berlin, with Germans believing that the US doesn’t really care about Russia, but “they just want to sell us their fracking gas.”

https://www.rt.com/russia/519288-gazprom-chairman-nord-stream-deadline/

If the Germans themselves want to torpedo this deal that would actually be good for Russia.

Germans paying more for shipped LNG supplies means cheaper production in Russia if you want to make stuff in factories.

Russia is already selling gas to the EU too cheap... they can make more money on other markets...

Pipes are on fire: gas supplies run out in Europe
Russian fuel remains the EU's last hope, by Oksana Bellona for Izvestia.
27 March 2021

The cold winter practically deprived the Europeans of gas: less than a third of the reserves remained in the underground storage facilities of the EU countries. This has already led to an increased demand for Russian gas - deliveries in January were record high. Gas reserves will have to be replenished in the summer - the hope is again in Russia. How critical is the shortage of gas for the EU, whether American LNG will help and whether Nord Stream 2 will save consumers west of Brest - in Izvestia's material.

Cold winter of 2021

Gas reserves in most European countries fell below 30% of the total volume of underground storage. By the end of March, blue fuel turned out to be 24.5 billion cubic meters less than in the same period in 2020, data from Gas Infrastructure Europe showed.

The average fuel inventory in Europe is 5.8% below the five-year average. So, in Germany, gas storage facilities are now filled only by 25.54%, in Austria - by 26.89%, in the Czech Republic - by 29.14%. The situation is better in Poland: 38.85% of the fuel remained there. France has the least gas - only 14.62% of the storage capacity.

The cold winter is to blame for everything, because of which the tanks began to rapidly empty. Frosts forced France to urgently buy Russian fuel. According to Gazprom, exports to this country have increased by almost one and a half times since the beginning of the year. Other European countries did the same. For example, Germany in January-February purchased Russian gas by 32.9% more than in the same period of 2020. Since January 1, Gazprom's export to non-CIS countries has grown by 32.9% to 34.5 billion cubic meters. Purchases increased by record Italy (plus 64%), Turkey (20.8%), the Netherlands (21.2%) and Poland (89.9%).

“Consumers have taken 64.2 billion cubic meters of gas from European UGS facilities. To replenish this volume, it will be necessary to pump at least 54% more gas than last year, ”Gazprom said. At the same time, the rise of gas from European storage facilities continues.

Buy gas in summer

Thus, as stated in Gazprom, in the summer, Europe will need a large additional volume of gas . As experts explain, the established practice of most energy companies (both large public and small private players) involves the use of a summer-winter spread (pumping cheap gas into storage facilities in summer with subsequent withdrawal in winter). European energy companies will be able to successfully “pump” in May-September.

European companies will systematically pump gas throughout the summer, while the sources will be either the cheapest supplies (which include supplies from Russia) if decisions are made for economic reasons, or objectively more expensive LNG, including from North America with taking into account the political factor , - points out Alexander Simonov, associate professor of the Faculty of Economics, RUDN.

Gazprom has budgeted for a gas price for Europe at $ 170 per thousand cubic meters for 2021, Deputy Chairman of the Board of the company Famil Sadigov said in December. This price is 35% higher than the cost of gas for Europe, included in the company's budget for 2020, which at times turned out to be still overestimated due to a drop in demand. Last year, at some European sites, the price of one thousand cubic meters of gas dropped below $ 70.

However, Russian fuel is still expensive for Europe. Russia is using a cunning strategy: supplies are not increasing so much, which creates an artificial shortage and keeps prices high. At the same time, supplies of American LNG are still more expensive, notes Vitaly Mankevich, president of the Russian-Asian Union of Industrialists and Entrepreneurs.

From words to deeds

Obviously, in such a situation, Europe will need more and more Russian gas. And the early launch of Nord Stream 2 is critically important for European consumers. Europe could easily fill up the missing reserves if the SP-2 was completed on time, but this did not happen. Some companies were forced to withdraw from the project under the threat of US extraterritorial sanctions.

Berlin and Washington have not yet been able to resolve their differences over the gas pipeline. One of the main demands of the Americans is the creation of a mechanism to stop the operation of the gas pipeline in the event of a reduction in transit through Ukraine. The head of the Bundestag Committee on Economics and Energy, Klaus Ernst, called this idea unacceptable: if Ukraine does not pay its bills, the Europeans may lose Russian gas.

However, the US continues to put pressure on the EU. At the end of March, US Secretary of State Anthony Blinken threatened Germany with new sanctions against German companies if they try to complete the gas pipeline. He demanded that the companies participating in the project stop working, stressing that they are at great risk. Berlin reiterated that Germany's position on Nord Stream 2 remains unchanged.

One way or another, Russia will continue to be a key supplier for the EU: it is easier and faster to receive natural gas through a pipe than liquefied gas from the United States. LNG must be pumped into LNG carriers, which have yet to reach their destination. Further - regasification and subsequent transfer through the pipeline. All this takes a long time.

Therefore, in the coming months, it is possible to predict the expansion of natural gas supplies from Russia to the European Union to record levels. But at the same time, supplies of liquefied gas from various countries of the world, from Qatar to the United States, may increase. Moreover, it will be 1.5–2 times more expensive than the Russian one - not the best option for European consumers, ”notes independent industrial expert Leonid Khazanov.

This state of affairs should push Europe to more actively defend its economic interests. Thus, Matilda Androuet , a member of the European Parliament from France, has already called for decisive action. Androuet stressed that Washington is violating international law by using extraterritorial restrictions, and called on the European Commission to finally move from "empty words" to deeds.

https://iz.ru/1142747/oksana-belkina/truby-goriat-v-evrope-issiakli-zapasy-gaza

In many ways the NSII is the geopolitical instrument the US says it is, but not by making the EU reliant on Russian energy, but to rustle around in the EUs pants to see if they have any balls there left over from colonial times so they can actually say no to the US for once.

The brilliant thing for Russia is that it is all win win.

If the US wins and NSII is blocked for good then Russia can divert the pipeline to Kaliningrad meaning they then have no reason at all to send any gas through the Ukraine. The EU will then have to buy more expensive LNG via ships which will be slower and much more expensive and not reliable in terms of filling unforeseen gaps in storage.

The point is that it will mean Russia can stop pumping gas through Ukraine and Poland... both hostile anti Russian countries, but the Russian Kaliningrad will get cheap piped gas direct from Russia without any money going to the Ukraine or Poland to get it there and cannot be intercepted by either of those two countries for whatever reason.

If they don't change the pipeline to Kaliningrad that just means they can stop off at Kaliningrad to drop off LNG if other pipes are blocked by Russias enemies, but the point is that even LNG Russian gas is still cheaper so there is a good chance at least some of the gas they buy will be Russian anyway.

The difference is that the EU will pay more for energy and it will become rather less reliable, which will impact production in a region that is a rival to Russia.

If they complete NSII then that will mean the EU will have to say no to the US... which is a good first step to the EU becoming an independent pole in the new multipole future... or they can remain Americas bitch if they want to... the cowards.

Well that raises another aspect KVS... with fixed pipelines it can only go where it goes, but with a ship... once it is loaded up and sets sail you could get a higher bidder for the product...

Obviously gas will be delivered to Kaliningrad first, but after that it depends on how much you want to pay and if someone is prepared to pay a little more, well they get first priority... that is called market forces... Russia learns this from the west... well they learned that the US destroyed a perfectly sensible profitable relationship between Russia and the EU because they wanted to sell their product but couldn't match the price the Russians were selling for so they tried to break that deal.

If the EU respects power and HATO and Germany need to deal with Russia from a position of power then perhaps Russia should be rethinking its relations with the west all together, because those idiots are psychos.

Why does America buy oil from Russia
26.3.2021

The Americans began to buy even larger volumes of Russian oil and fuel oil for the production of gasoline. Deliveries have peaked in ten years, the US Department of Energy calculated. How did it happen that Washington is increasing its oil purchases from one of its main geopolitical opponents?

The purchase of Russian oil is clearly at odds with the US energy doctrine, but the Americans continue to buy it, and more and more every year. Last year, imports of oil and petroleum products from Russia to the United States reached a maximum since 2011, according to the US Department of Energy. On average, in 2020, Americans bought 538 thousand barrels per day from Russia. As a result, Russia became the second importer of oil and oil products to the United States in terms of supplies, pushing Saudi Arabia to the third place (538 thousand against 514 thousand barrels per day).

The first, as always, is held by neighboring Canada. There, the Americans buy 3.2 million barrels per day (minus 5.4% compared to 2019).

The Americans began to increase imports of Russian raw materials in 2019 - in April of that year, the figure exceeded 500 thousand barrels per day. Last year, the volume of supplies in May-June fell due to strong restrictions on oil production under the OPEC + agreement. But in July, the Americans again began to purchase more than 500 thousand barrels per day from Russia. As a result, over several years, the share of Russian oil in the total import of black gold increased from 0.5% to 7% in 2020.

Why do Americans buy Russian oil and oil products? Is there no one else? It turns out that there really is no one else. Moreover, the United States has driven itself into this geopolitical trap.

“The main reason is clear. Trump imposed tough sanctions on Venezuela, and a shortage of heavy oil arose at American refineries. Russia took advantage of this deficit. The market is global, traders are taken to where they can sell profitably, ”says Konstantin Simonov, head of the National Energy Security Fund.

As a result, a paradoxical situation has developed, both economically and politically.

On the one hand, the United States has long ceased to be a major oil importer. On the contrary, they began to produce their own shale light oil and were able to become a major oil producer and exporter in the world. On the other hand, they continue to depend on the import of heavy oil, which the political opponent, Russia, has.

“This is due to the economics of US refineries, which have higher margins when refining heavy oil. This is how an independent oil refinery is built in the United States, ”explains Simonov. It is more profitable for the Americans to export their own light oil, and to process foreign heavy oil at their refineries.

It is curious that Russia does not sell crude oil to the United States, but fuel oil. American refineries are mixing Russian fuel oil with light grades of oil to bring them up to parameters suitable for refining in factories that were built before the shale boom in the United States.

“No one really has fuel oil in such volumes, because it is a very specific low-quality fuel. Unfortunately, our oil refining has not been fully modernized, and we have such a product. But again, if we did not have fuel oil, we would, like Venezuela, supply crude viscous oil there. It is important that we had and still have a competitive proposal for the United States, ”says Simonov. The United States had no alternative in heavy oil grades, because they themselves removed both Venezuela and Iran.

The economy of supplying Russian fuel oil for the United States is most likely beneficial, otherwise no one would buy it. “Against the background of the weakening ruble, Russian oil is becoming much more profitable than other producing countries,” notes Artem Deev, head of the analytical department at AMarkets.

Last year, the largest importer of Russian oil to the United States was Valero, which bought almost 55 million barrels, followed by Exxon with almost 50 million barrels. Collectively, these companies accounted for nearly 50% of total Russian oil imports to the United States, according to customs data.

It is curious to see how the United States politically tries to play up this extraordinary story. "The Democratic Party is now bringing down everything on Trump:" Look to what he brought America to - the Russians, it turns out, are supplying oil to the United States because of this figure. " Trump himself said back in January that now Biden will come with his "green" program, collapse American shale oil, and the Russians will seize the American market with their oil, "says Konstantin Simonov.

Although, in his opinion, it is difficult to blame Trump. His task was to promote American oil to export markets, and he successfully accomplished it, removing competitors - Venezuela and Iran. “In general, American oil has only benefited from this. But there was such a political joke, ”the expert adds.

It is curious that literally last week it became known about the first deliveries to the United States of Russian light ESPO oil in the amount of more than 3 million barrels. Simonov is sure that this is some kind of one-off story. Because the United States does not make any sense to buy light oil from Russia when they have their own.

The deal may have come about due to low freight rates and low demand for the brand from independent Chinese refiners, in part due to an increase in the supply of cheap Iranian oil, analysts at Reuters say. The Russian ESPO is generally China-oriented and is popular with independent refiners in Shandong province. These refineries are geographically located relatively close to production - delivery takes only three to four days.

As for Saudi Arabia, in recent years it has been placing more and more emphasis on the more premium Asian region. It became China's largest oil supplier last year. A bitter battle over the Chinese market is taking place between the Saudis and the Russians.

“Saudi Arabia is increasing supplies to the countries of the Asia-Pacific region, since the market volume there is larger than in the United States, there are more consumers, and the price parameters are more profitable. The Saudis are following the path of increasing their market share in Asia, therefore they additionally offer discounts to consumers, as a result, the share of Arab oil in these markets is gradually growing, ”Deyev explains.

Text: Olga Samofalova

https://m.vz.ru/economy/2021/3/26/1091343.html