Russian fossil energy (Oil and Gas and Coal) Industry: News #4

The switch in China seems to be pushed in the other direction now.
My friends from HK are reporting that the local govt get a galaxy-level spin. They are to "cooperate and produce and export" at 150%

The pig flu was the same there - nobody could walk into a room without cleaning their shoes on the "antibacterial matt".
That was funny, as there were more pathogens on that matt than anywhere else, but ... it is the spirit that matters!

The EU is forced to increase purchases of liquefied gas in Russia, by Sergey Tikhonov (Sabetta - Murmansk). 12.14.2022.

Russia is ready to quickly build and assemble plants producing liquefied natural gas (LNG) on its own. From 2023 to 2026, Russia will have additional LNG production capacity for 48-54 billion cubic meters of gas. With a high degree of probability, these volumes will end up in Europe directly or through intermediaries, if only because their transportation from the Baltic and Yamal to Europe will be easier and cheaper than deliveries to the countries of the Asia-Pacific Region (APR).

The center for the construction of large-capacity offshore structures (TsSKMS) in the Murmansk region of the Novatek company has almost completed the first line of the Arkitik LNG-2 plant, and now it is being debugged. After that, she will be transported to the Gydan Peninsula in the YaNAO, where she should arrive in August 2023. Despite the sanctions, the deadlines for putting the plant into operation remained the same. The launch of the first line is scheduled for December 2023. The construction of the second (partially with Russian equipment for liquefaction of gas) and the third (fully with domestic equipment) is in full swing, and their launch is expected in 2024 and 2026, respectively. The total capacity of the plant will be 19.8 million tons (6.6 million tons for each line).

In addition to Arctic LNG-2, Novatek plans to build Ob LNG in the near future (the capacity of the plant is unknown; according to information from various sources, it can range from 2.5 to 6.3 million tons), as well as Arctic LNG- 1" with a capacity of 19.8 million tons per year. There is also Gazprom's petrochemical complex in the Baltic, which plans to produce 13 million tons of LNG per year. Taking into account the existing Yamal LNG plant and plans for the gradual commissioning of new enterprises in 2026, LNG production capacities in Russia (excluding Sakhalin-2, which is focused only on supplies to the Asia-Pacific countries) will exceed 60 million tons (83. 5 billion cubic metres).

Even our most distant plans for the transfer of export pipeline capacities to the east, like the Power of Siberia-2, will not cover even half of the losses from a decrease in the volume of deliveries to Europe. It is also not possible to count on a quick normalization of relations with the EU now, so talks about increasing exports to the West through Ukraine, resuming the operation of the Yamal-Europe gas pipeline and selling gas through Turkey are only theoretical. There remains LNG, which, due to the peculiarities of trade, in most cases has no nationality, which is proved by statistics - its supplies to Europe are already growing.

Russian pipeline gas exports to Europe have almost ceased. Pumping is still going on through Ukraine and along the European continuation of the Turkish Stream, but it almost does not reach North-Western Europe, including Germany - in the past, the main consumer of our gas. And the undermining of the Nord Streams made such deliveries simply physically impossible. Even the surviving Nord Stream 2 line cannot be launched without a thorough examination. In addition, the political mood in the EU is clearly preventing a productive dialogue on increasing pipeline supplies from Russia.

The EU countries do not have any full-fledged alternatives to replace it. There are hopes for LNG from the US and Qatar. But the Americans are still getting off with unsupported promises, and Qatar even declares that Doha has no free volumes of gas for Europe in the near future. The exception is Germany's agreement with the American company ConocoPhillips, which will supply 2 million tons per year of Qatari LNG (about 2.8 billion cubic meters of gas) to the German market, but not before 2026.

Our LNG is nearby. Of course, we can sell it to the countries of the Asia-Pacific region, but it is economically more profitable to deliver it from Yamal and the Baltic to Europe, both for us and for the Europeans.

Liquefied gas will indeed become a key tool for replacing Russian supplies to the European market, says VYGON Consulting consultant Ivan Timonin. Based on the actual dynamics, by the end of 2022, the region's LNG imports will grow by more than 60% compared to the level of 2021 - up to about 120 million tons, or 160 billion cubic meters of gas. And on the horizon of five years - taking into account the commissioning of new liquefaction capacities, as well as the growth in demand for the product in Asia and other regions - this figure will increase to about 140 million tons (195 billion cubic meters), the expert notes.

Europe has no full-fledged alternatives to replace Russian gas.

Moreover, in his opinion, most of this growth will be provided by supplies from new North American, as well as Qatari assets. In the medium term, gas production is expected to grow in the United States, provided almost entirely by shale assets: by 2025, production will increase from 966 billion cubic meters in 2021 to more than 1 trillion cubic meters, and by 2030 - to almost 1.1 trillion cubic meters. At the same time, since the prospects for growth in domestic consumption in the United States are limited, new volumes will be directed mainly to the needs of new export-oriented LNG projects, Timonin said.

But there is a nuance here. Will it be profitable for traders to supply American LNG to Europe. Prior to the energy crisis, the Asia-Pacific countries were the premium market for liquefied gas sellers.


Kirill Rodionov, an expert at the Institute for the Development of Fuel and Energy Complex Technologies, notes that gas demand in the EU will stagnate in the coming years due to the relatively low rate of commissioning of gas-fired power plants. By July 2022, only 9 GW of gas-fired power plants were under construction in the EU. For comparison, the increase in the capacity of solar panels in the EU in 2021 reached 21.4 GW, and wind generators - 10.4 GW.

It is unlikely that a non-growing market will be premium, this is possible only during periods of a sharp shortage of goods. In the long term, Asia-Pacific countries will be more attractive for traders from the US and Qatar. Periods of increased demand in Europe are, of course, possible, but gas at prices above $1,000 per thousand cubic meters is hardly a bargain for Europeans. As a result, the countries of the Old World will have to replace Russian pipeline gas with LNG supplies from Russia to the maximum, even if they are supplied by European or Chinese companies. Another thing is that we will have a gradual increase in production volumes, and EU gas will be needed in the spring of 2023.

https://rg.ru/2022/12/14/ballonami-evro.html

DR Congo Invites Russian Companies to Develop Gas & Oil Fields, by Maria Konokhova for SputnikNews. 12.15.2022.

Energy is one of the main areas of cooperation between Russia and African countries with a great potential for growth. The head of the African Energy Chamber, Nj Ayuk, recently told Sputnik that Russia could play a leading role in implementing energy projects on the continent.

The Democratic Republic of Congo (DRC) welcomes the possible participation of Russian companies in the development of gas and oil fields in the country, said Joseph Kindundu Mukombo, adviser for economic affairs and communications at the DRC Embassy in Russia.

"The DRC has huge gas and oil reserves, but they are still poorly developed. In July this year, the government announced a tender for the development of 24 oil fields. We hope that Russian companies will participate in the tender. We know that Russia has great expertise and technology in this area," he stated, speaking at the plenary session of the 20th international forum "Gas of Russia 2022: Turn to the East."

According to him, Kinshasa hopes cooperation with Russia will eventually lead to the DRC exporting its gas and oil to other countries. However, he underlined that this requires infrastructure development, with which Russia could also help by providing investments and technical assistance.

“As for gas, we have great potential, but it must be developed first. We would like Russia to help us for the benefit of both sides. There is a large territory in the center of the country that needs to be explored, and the DRC is open to cooperation with Russian companies,” the adviser said.

Mukombo explained that the DRC wants experts in the oil and gas sectors who have expertise in transporting energy carriers, to provide assistance, as the country has “limited access” to the sea, while gas fields are located in the center of the continent.

He added that apart from the gas transportation infrastructure, the Central African country also needs gas storage facilities.
"We know that Russia is a powerful country that is competent in building gas pipelines and storage facilities. Our cooperation will allow us [the DRC] to produce, transport, store and export energy resources,” concluded the diplomat.

Earlier, Oleg Ozerov, ambassador at large of the Russian Ministry of Foreign Affairs, stated that energy security will be raised at the second Russia-Africa summit scheduled for July 2023. According to him, the summit is expected to give a new impetus to Russian-African cooperation in areas of mutual interest, including energy, science, investment and trade.

https://sputniknews.com/20221215/dr-congo-invites-russian-companies-to-develop-gas--oil-fields-1105492405.html

The whole outcome of this conflict between east and west is that the EU no longer gets cheap oil and gas piped to them from Russia, but instead will buy more expensive oil and LNG on the open market, which basically means still buying from Russia but for the EU to pay more.

It might be more expensive for Russia to ship LNG to Asia and other places, but they should do it anyway, and impose serious tariffs on any shipped energy products to the EU to pay for the facilities they need to liquefy the gas for transport... but once it is in the ship that ship can take it anywhere... it might cost more to sail past the EU and deliver it to countries in Africa or Central or South America, but I think most of the time it would be worth it... just to hammer home to the EU what they are giving up right now.

It was politics that cut the pipes, it can be politics that makes it more expensive for the EU going forward because that was the bed they made.

Cooperation with Russia and Congo would be excellent for both sides...

India to remain biggest buyer of Russian oil – Reuters

The country’s share of imports may exceed 70% of all loadings this month as EU buyers shun Russian crude.

India is expected to remain the top importer of Russian Urals crude oil in December for the second consecutive month, Reuters reported on Saturday, citing Refinitiv data and traders.

In November, the populous nation accounted for about 53% of the total tanker shipments of the grade, marking an all-time high.

India’s share of Russian crude exports and volumes purchased will increase month-on-month, despite a shorter loading plan for Russia’s western ports, traders told the news agency.

In December, market participants expect India’s share to top 70% of total loadings.

According to four market sources cited by the media outlet, India, the second-biggest consumer of oil in Asia, has been purchasing Urals crude at bigger discounts this month. It has paid well below the $60 per barrel price limit for Russian sea-borne oil set by the EU, G7 nations and Australia earlier this month.

The number of countries buying Russian Urals crude – one of the most popular grades as a result of the short trading cycle, cheap shipping and attractive refinery yields – is forecast to fall to just four, according to data from Refinitiv Eikon cited by Reuters.

India has taken at least two million tons of the grade since the beginning of the month. Bulgaria, which managed to obtain an exemption from the EU oil ban, is expected to become the second-largest buyer of Urals crude in December, shipping up to 800,000 tons.

Shipments of Urals blend oil to China will reportedly remain low with only one shipment of 140,000 tons sent as of December 16. However, traders expect more Urals to be exported to China by the end of the month. Meanwhile, Turkey, which has been actively buying Russian oil this year, has purchased just one December shipment of 140,000 tons.

https://www.rt.com/business/568424-india-top-buyer-russia-oil/

In November, reports emerged that Poland intended to push for EU sanctions against the northern string of the Druzhba pipeline, through which both Poland and Germany receive Russian oil, to obtain the legal grounds for unilaterally terminating existing contracts with Moscow without penalties

Sounds like they are planning to overcommit Russia to delivering oil to them to then cut the contracts in a way they don't pay penalties for breach of contract... I would say screw them any way you possibly can over this...

Just like the US using the US dollar as a weapon is going to break the US dollar because Russia and China and other countries are going to recognise the dangers and find alternatives... which actually weakens the dollar by the way, but using SWIFT and this price cap is using the wests shipping capacity monopoly and its insurance and brokerage monopoly to damage and restrict Russia means Russia and her rest of the world customers will find alternatives to all these things.

The west is destroying its own control over shipping trade and financial commerce in an effort to damage Russia and the end result is that it is destroying its own monopoly and hurting itself because it no longer makes money on international trade if it is not in US dollars or Euros, and when the rest of the world is shipping its own stuff and insuring its own stuff, not only does the west miss out on that income, they also miss out on that information about who is doing what and who is buying what from whom...

The west fears a strong Russia and a strong China... and to be precise the US fears a strong EU too and all they are managing to do is destroy the EU and US and actually make Russia and China and the rest of the world more independent and richer while cutting their own income they got from shipping Russian goods to other countries.

The longer this continues the more desperate the west will become... pretty clear the smart people no longer have any say and the angry vindictive people get the choices and make the decisions...

Russia will redirect gas production and supplies from the West, says Russian Deputy Prime Minister, 12.24.2022.

Moscow will focus on Asian markets despite calls from the European Union (EU) to increase supply, Deputy Prime Minister Aleksandr Novak says.

Russian gas is still in high demand in the EU despite the bloc's latest sanctions on the country's energy exports, but Moscow intends to divert trade flows elsewhere, Deputy Prime Minister Novak said on Friday.

In an interview with the Russia24 channel, he noted that "European colleagues are constantly asking us to increase supplies" through existing infrastructure, such as the TurkStream or Blue Stream pipelines and the Ukrainian gas transportation system, adding that the European market remains relevant for Russia.

But given the current "political climate" in the EU to reduce its dependence on Russian gas, Moscow is looking to other markets to redirect supplies, the deputy prime minister noted.

"Because our gas is in demand, it is cheap, we have large reserves and we will develop these areas," he added.

Russia will diversify trade flows by increasing liquefied natural gas (LNG) supplies and piped gas deliveries to China, making Asia one of its top destinations, Novak said, adding that the country has increased LNG production more than threefold.

"If earlier only 11 million tons [of LNG] were produced in Russia, Today there are already four plants operating, with a total capacity of 36 million tons," the minister stressed.

In the next three or four years, Russia should increase LNG production to 60 million tons, and then raise the figure to 100 million tons annually, Novak projected.

He also recalled that, along with increasing supplies through the Power of Siberia pipeline, Russia and China have an agreement to build gas infrastructure with the capacity to deliver an additional ten billion cubic meters annually.

Yandex Translate from Portuguese

https://sputniknewsbrasil.com.br/20221224/russia-vai-redirecionar-producao-e-fornecimento-de-gas-do-ocidente-diz-vice-primeiro-ministro-russo-26610852.html

Novak warns of gas shortage in Europe due to sanctions, 12.25.2022.

Deputy Prime Minister Novak: EU sanctions provoke a long-term crisis and a gas shortage in the region.

This year the Europeans had to cut their gas consumption by 40-50 billion cubic meters. m due to the closure of enterprises for the production of fertilizers, gas chemistry, metallurgy and "this is just the beginning," said Novak.

The EU's decision to impose a gas price ceiling and other sanctions are provoking a long-term crisis and gas shortages in the region. This was stated by Deputy Prime Minister of Russia Alexander Novak in an interview with TASS .

According to him, the decision to impose a ceiling on gas prices shows that the EU authorities are "not guided by economic sound calculation", but "flirt with their voters", receiving momentary political benefits, but not economic ones.

“If we talk about long-term prospects, then with such decisions they provoke a deep long-term crisis, destabilization in Europe,” he noted.

Novak pointed to the limited resources and short-term growth of gas production in Norway and the UK, and added that LNG supplies to the EU could be unstable.

https://www.rbc.ru/economics/25/12/2022/63a871b89a794705afacd7d1

The pivot away from Europe towards Asia but also the rest of the world... africa, central and south america is a good thing for Russia and for the rest of the world.

Europe has been funding nazis and people openly proud of murdering Russian speakers in their own country... what sort of relationship should Russia have with them after this?

A pivot of Russian gas away from Europe will cause shortages and suffering for the whole continent. Because they have to endure freezing temperatures during wintertime they'll have to continue importing Russian gas. With the negative decision of Russia to accept gas price caps, this will cause the enhancement of gas black market there, thereby developing what the USSR experienced in the past due to fixed price controlling: shortages and black market, together with rising costs of living for the population.

Russian deputy PM: European gas prices 'will remain high due to energy shortage', 12.26.2022.

The cost of gas in Europe will remain high in the near future due to the shortage of energy, predicted the Russian deputy prime minister responsible for the energy sector, Alexandr Novak. He explained that prices will not be able to return to the levels of the beginning of 2021, when gas cost between 200 and 250 dollars per 1,000 cubic meters.

Alexandr Novak stressed that the dynamics of prices will depend on winter temperatures. However, he does not see anything in the short term any reason why the cost of gas could go down. The Russian deputy prime minister also noted that the general energy price situation is, in his opinion, very unstable and suggested that in the case of oil and gas this trend will be maintained in 2023.

"At the moment we notice a tendency to instability. As for oil, the price can vary from 65 to 130 dollars per barrel. In the case of gas, the situation is similar. The price reached $4,000 per 1,000 cubic meters, now it's around $1,000," the senior official explained.

This is happening at the same time that Russia is experiencing new challenges every day and coping with them, as Western countries impose more restrictions. However, all these sanctions also affect Western countries, since inflation is growing and economic development is slowing down there, the politician specified.

He added that anti-Russian sanctions may have caused the gas price to rise and recalled that an embargo on Russian oil products to Europe will come into force in February 2023, after which diesel prices could change. Therefore, the deputy prime minister added, Russia will try to divert gas to new markets, while Europe is constantly being asked to increase supply through existing gas pipelines. In addition, he explained that the European market is important, but countries remain determined to reduce dependence on Russian supplies.

"There is a demand for our gas"

The volume of gas sent to the EU was 19.4 billion cubic meters in the first 11 months of 2022 and has increased, Novak said. He also highlighted the stable requests for fuel from European countries and stressed that "today we can say with confidence that there is a demand for our gas."

"Therefore, we continue to rate Europe as a potential market for our products. Even now this market is not closed. For example, this year we have managed to significantly increase the supplies of liquefied natural gas [LNG] to Europe, up to 19,400 million cubic meters in the first 11 months of 2022 and 21,000 million cubic meters are expected by the end of the year," he declared.

In his words, this growth occurs despite a large-scale campaign against Russia and "acts of sabotage" against the Nord Stream gas pipeline. The deputy prime minister also stated that his country is ready to supply Yamal gas through the TurkStream in order to avoid a shortage of this hydrocarbon in Europe.

As Novak stressed, TurkStream currently supplies 42 million cubic meters of gas per day, a third of the contracted volume. The official also announced that Turkey intends to create a centre that will serve to increase fuel supply to Europe.

Yandex Translate from Spanish

https://sputniknews.lat/20221226/vice-primer-ministro-ruso-los-precios-europeos-del-gas-seguiran-altos-por-la-escasez-de-energia-1133964459.html