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Gasprom change its business model

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Gasprom change its business model

Unread postby sparky » Mon 08 Dec 2014, 22:05:38

.
following a few years of unpleasantness and a few weeks of financial turmoil Mr Miller CEO of Gasprom had this to say

“Our strategy towards the European (gas) market is undergoing fundamental changes.
The decision to halt the South Stream marks the beginning of the end of our previous market model,
when we aimed at ultimate customer delivery in Europe,” the head of Gazprom, Aleksey Miller, told Rossiya 1 Channel in an interview.

“Love cannot be forced,” Miller said. “If a customer doesn’t want doorstep delivery, then he apparently has to put on clothes and go shopping, and if it is winter time – he’ll have to bundle up and go out with any package he wants,”
Miller said, adding that in the case of the EU “it could as well be the Third Energy Package”.

“Shopping will now be done at the tie-in facility,” which will be the trading platform on the Turkish-Greek border, indicated Miller. Unlike the South Stream, the new project does not fall
under the EU’s Third Energy Package.

The third energy package is a set of guideline mandating the pipeline operator to keep half the capacity open for other suppliers , Gazprom do not see why they should pay for the work to get competitors to have a free ride

A good summary http://www.oxfordenergy.org/wpcms/wp-co ... orward.pdf
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Re: Gasprom change its business model

Unread postby dissident » Mon 08 Dec 2014, 22:36:34

Russia is still pandering to these haters. It should sell gas at its border. If it is too much bother for the customers and they are afraid for their "energy independence", then they should arrange for other options: LNG and/or pipes from Qatar and Iran.

But at least the right decisions are finally being made not to waste time with the clowns in Brussels.
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Re: Gasprom change its business model

Unread postby Loki » Mon 08 Dec 2014, 23:58:13

dissident wrote:Russia is still pandering to these haters. It should sell gas at its border. If it is too much bother for the customers and they are afraid for their "energy independence", then they should arrange for other options: LNG and/or pipes from Qatar and Iran.

But at least the right decisions are finally being made not to waste time with the clowns in Brussels.

Just as likely the Russians will go begging in Brussels, hat in hand, when their economy starts circling the drain even faster than it already is. Should be highly entertaining.
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Re: Gasprom change its business model

Unread postby Synapsid » Tue 09 Dec 2014, 01:57:12

dissident,

The idea that Russia should sell its gas at its border has been raised here several times, and it seems to me to be the simple and best way. What do you think has kept that from being done?
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Re: Gasprom change its business model

Unread postby AgentR11 » Tue 09 Dec 2014, 02:26:16

Loki, its a bit odd to think we can really know much about the Russian economy at this point. The currency was just floated; it seems to have come to a stable point near 54/US$; it'll take a couple years for this transition to ooze out into the economy and allow Russians to produce things they should have been producing domestically to begin with, but couldn't because they were facing a built in 50% import subsidy at the hands of their own central bank.

Whether they sink or swim is completely unknowable at this point in time.

Words like "recession" lose most of their meaning when placed up against something of the magnitude that they pulled off. You might as well just say the pre-november economy is DEAD, never to rise again. A new and different economy was born when they pulled the plug on a locked in trading range. It may suck horribly, or it could be quite dynamic and productive.
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Re: Gasprom change its business model

Unread postby sparky » Tue 09 Dec 2014, 15:29:12

.
It certainly is starting to curtail the wild shopping sprees and shopping holidays
all European countries report a drop in trade with Russia , both for discretionary spending and equipment goods
the fall in value of the Ruble is squeezing spending .
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Re: Gasprom change its business model

Unread postby dissident » Tue 09 Dec 2014, 18:24:22

Synapsid wrote:dissident,

The idea that Russia should sell its gas at its border has been raised here several times, and it seems to me to be the simple and best way. What do you think has kept that from being done?


Coming out of the collapse of the USSR it was a way to engage in big power "patronage" politics. Various politically motivated discounts were in place to curry favour with formerly friendly regimes. Ukraine was the most shining example of this engagement. But over the last 10 years this has all washed away.

At the same time Gazprom wants to control the pipe down to the distribution, being the right and proper monopolist that it is. Since NATO has squeezed Russia out of its energy market, there is no point for Gazprom to try and build or maintain a vertically integrated distribution business. In this case the sale at the border is the natural solution.

The deal with Turkey is actually part of the old style political engagement. Turkey gets a discount for its gas from Russia as part of the deal. I guess its foreign policy should have a less sharp edge vis a vis Russia from now on.
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Re: Gasprom change its business model

Unread postby AgentR11 » Tue 09 Dec 2014, 18:27:45

sparky wrote:It certainly is starting to curtail the wild shopping sprees and shopping holidays
all European countries report a drop in trade with Russia , both for discretionary spending and equipment goods
the fall in value of the Ruble is squeezing spending .


It is squeezing spending, by Russians, OUTSIDE of Russia. There's a reason for that. Before November, the Central Bank of Russia was essentially paying for about 40% of whatever Russians felt like buying in Germany, UK, or France.

That is no longer the case.

Who wouldn't be motivated to splurge spend at any opportunity if someone you don't care about is going to pay for 40% of everything you buy.

Now, I'm not suggesting there is no discomfort involved, but this isn't discomfort in terms of something earned and taken away, its discomfort in terms of an addict losing access to his stash. It will take time, withdrawal will be painful. The end result however, is much healthier than continuing on with the addictive substance.
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Re: Gasprom change its business model

Unread postby Synapsid » Tue 09 Dec 2014, 19:17:29

dissident,

Thanks.

There's an article at Bloomberg today on the plan to build a pipeline to Turkey and sell some of the gas to the EU from the Turkish/Greek border. The writer takes a dim view of the idea.
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Re: Gasprom change its business model

Unread postby dissident » Wed 10 Dec 2014, 15:12:29

http://www.euractiv.com/sections/energy ... nal-310712

Following a statement by EU ministers who said they wanted Russia to clarify its intentions concerning the South Stream gas pipeline, Russian gas monopoly Gazprom confirmed yesterday (9 December) that the decision to abandon the project is final.


Yeah, I guess the retarded eurocrats have called "Putin's" bluff.
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Re: Gasprom change its business model

Unread postby sparky » Thu 15 Jan 2015, 23:14:44

.
Well , for the Eurocrats slow of understanding , a meeting in Moscow yesterday made thing quite clear
supply through Ukraine is to be discontinued
Maros Sefcovic, the European Commission’s vice president for energy union was quite shocked

http://www.businessinsider.com.au/russi ... ine-2015-1

from Bloomberg "Sefcovic said he was “very surprised” by Miller’s comment, adding that relying on a Turkish route, without Ukraine, won’t fit with the EU’s gas system. "

Surprised ???? does this guy read newspapers !

“We don’t work like this,” he said. “The trading system and trading habits -- how we do it today -- are different.”

Well , thing change , the one with the gas make the rules , dealing with Turkey is going to be a lot of fun , on top the Turks get a discount and the transit fees , as juicy a plum as they come

"“We have informed our European partners, and now it is up to them to put in place the necessary infrastructure starting from the Turkish-Greek border,” Miller ( Gasprom CEO ) said. "

Translation .....YOU pay for the pipeline !

“I believe we can find a better solution,” Sefcovic said. " .....no kidding !! your move now !
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Re: Gasprom change its business model

Unread postby dissident » Thu 15 Jan 2015, 23:43:54



One has to admire the Orwellian propaganda:

This was a major strategic move by european because Russia has had a history of cutting off gas.


The only two cases since the beginning of USSR sales of gas to western Europe have been in 2006 and 2009. In both cases it was the Ukrainian government run by Yuschenko and "gas princess" Timoshenko that cut off the gas.
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Re: Gasprom change its business model

Unread postby sparky » Fri 16 Jan 2015, 01:22:53

.
Actually Ukraine has an history of stealing gas ,
now the business model is , we give you what you pay for , in advance !
as for transit fees , well it was good as long as it lasted but we are tired of being blackmailed
Russian proverb , give the time of day to an Ukrainian and he keep the watch
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Re: Gasprom change its business model

Unread postby dissident » Fri 16 Jan 2015, 18:31:21

http://russia-insider.com/en/2015/01/15/2440

Yesterday on Wednesday the EU negotiated with Gazprom in Moscow. The EU negotiators had three aims:

1. Pressure Russia into extending the special winter pricing on gas supplies to Ukrainian due to end in March,
2. Force Russia to further unilateral concessions by forcing all European energy purchases to happen through a new “European Energy Union”,
3. Pressure Russia to resurrect the canceled South Stream gas pipeline project and build it in accordance with the restrictive rules of the Third Energy Package.

The Russian response was a cold shower.

Firstly, Gazprom said there is no need for a special summer agreement on Ukrainian gas purchases, as a valid contract already exists.

In practice, this means that all the concessions Kiev has received for the winter season are temporary and there is no space for negotiations.

If the EU wants to ensure their gas transits through Ukraine then it must put pressure on Kiev to comply with existing agreements.

If Kiev needs gas it cannot afford to pay – thus endangering transit deliveries to EU countries – it is not Russia's problem.

The same applies to Kiev's gas debts; the EU will have to pay both the Ukrainian gas debts and any future gas purchases.

Secondly, Gazprom announced that the South Stream gas pipeline project is dead and will not be realized. The project collapsed under US and EU pressure.

The greatest obstacle turned out to be EU's Third Energy Package. It places heavy restrictions on how Gazprom could use its own pipeline; Gazprom could only use 50% of South Stream capacity and would have been forced to offer the remaining 50% to third parties.

Although all the agreements between Gazprom and the various transit and consumer countries were made before the Third Energy Package entered into force, the European Commission now demands that it is applied retroactively.

Russia's solution is as follows: Gazprom will build the pipeline to Turkey and extend it to the Turkish-Greek border. The pipeline will end in a gas distribution hub near the EU border.

If the EU wants to buy gas, it will have to build a pipeline to Turkey at its own expense. It will also need to expand the gas transport capacity between its South European member countries – and do so under the constraints imposed by its own Third Energy Package.

The final punch to EU arrogance was Gazprom's declaration that after the completion of the gas hub and the Turkish pipeline Gazprom will end all gas transit through Ukraine. Russian gas will only be available through Turkey!


To think the EUrocrat clowns sent over a team demanding Russia bend over and submit says it all about how detached from reality the west is.
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Re: Gasprom change its business model

Unread postby Tanada » Fri 16 Jan 2015, 19:18:08

The EU is not the only customer of a captive Russia and they need to get their heads wrapped around that fact. China, India, Japan, Korea and points close to those are the future customers who Russia is courting today. If the EU wants to play hard ball they will discover Russia has sold the ball east instead of west, with people who appreciate their suppliers.
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Re: Gasprom change its business model

Unread postby Sixstrings » Fri 16 Jan 2015, 19:27:07

Tanada wrote:The EU is not the only customer of a captive Russia and they need to get their heads wrapped around that fact. China, India, Japan, Korea and points close to those are the future customers who Russia is courting today. If the EU wants to play hard ball they will discover Russia has sold the ball east instead of west, with people who appreciate their suppliers.


I respect your view on this, and it's certainly what the Russians hope.

I just see things differently.

Europe may not even need their gas. There's LNG coming in by ship into Poland, from Qatar. They can get LNG from the US. Don't we have a lot of gas? Our energy corps just want to do business, they are not state owned, so for customers I think that's a superior supplier.

And isn't there some kind of pipeline that may be built, and that's part of what Syria is about. So you could be getting nat gas right from qatar or wherever, into Europe.

Also -- isn't there plenty of shale oil and nat gas in the US alone, and we've got a good 30 years on this from what I understand. Peak oil is delayed, I think.

So, okay.. let them sell to China and India.. China and India need energy too, it's ok! We're not hogs, we don't want to take it all, I'm okay with China and India having energy. Who else is going to make my plastic pumpkins and take my phone calls, when I call in for tech support.

I don't see this as a threat, at all. Because Putin has miscalculated, China and India are never going to go full monty "anti west" as Russia has. The Chinese are in a different situation, they have a different culture, they have a larger requirement for *STABILITY*, they will never rattle sabres with us as Russia has done, and they want to keep doing business with us.

So it's ok, Russia is looking for an axis ally that isn't really there, China will just buy their gas and get it on the cheap and still do business with us, that's all.
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Re: Gasprom change its business model

Unread postby sparky » Fri 16 Jan 2015, 21:52:50

.
the pipeline gas is WAY cheaper than LNG , this is due to two facts ,
the liquefaction process is inherently costly it require compression and cooling , expensive specialized vessels and expensive specialized on shore pumping and gaseification , pipeline gas basically only require a standard compression and a tap
the capacity is restricted by infrastructure and transport constraint ,
How much capacity has the liquefaction units ,
How much terminals are available ? where ? are they connected to a gas grid ?
How many spare LNG tankers are available ?
distance is also a critical factor , the Qatar and Australian suppliers are the closest ( Nigeria is building )and sailing time is long so are the transport cost , both for time at sea and for fuel , the turnaround is slower the longer the trip

The funny thing is Russia , with Chinese money , is developing LNG at their Yamal fields , to free itself from its pipeline customers , this thing cut both ways
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Re: Gasprom change its business model

Unread postby Sixstrings » Fri 16 Jan 2015, 23:08:34

pstarr wrote:The geniuses at NATO just bombed the Syrian pipeline today.


Well, lol, there ya go. Proof there really is no grand strategy masterplan to get Europe using a trans-syria pipeline, or onto american nat gas. If you are correct, and nato just bombed it anyway, then that is apparently not the strategy.

Sometimes a cigar is just a cigar.

Western policy is whack-a-mole, just smaking down problems as they pop up, there's really no big overriding strategy to it. Which you can't have, anyway, in dynamic free societies cuz guess what -- gov really does not control everything. It's just a fire dept, puttin' out fires.
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