Ulenspiegel wrote:The basic weakness of Russia is that it can only hurt Europe by cutting very deep into her own flesh, possible but IMHO quite unlikely when the Russian economy is already expected to shrink by 5% without such a move.
And once again, check the capacity of North Stream and what is actually used.
Russia and China have begun the construction of a new gas pipeline linking the countries, with a ceremony in the Siberian city of Yakutsk.
China's CNPC has agreed to buy $400bn (£240bn) of gas from Russia's Gazprom.
Russia will ship 38 billion cubic metres (bcm) of gas annually over a period of 30 years.
The deal will lessen Russia's dependence on European buyers, who have imposed economic sanctions because of the crisis in Ukraine.
The construction ceremony was attended by Russian President Vladmir Putin and Chinese Vice-Premier Zhang Gaoli.
China will start work on the construction of its side of the pipeline in the first half of 2015, Mr Zhang said.
The first gas will be pumped from Siberia to north-east China in early 2019.
Russia pivoted decisively towards the East on Sunday, after signing another mega-energy agreement with China, which could dwarf Europe as the largest consumer of Russian gas once the project is completed.
Russian President Vladimir Putin’s fifth meeting in a year with his Chinese counterpart, Xi Jinping, on the sidelines of the summit of the Asia-Pacific Economic Conference (APEC), yielded an agreement that seemed to rebuff Europe, which had imposed sanctions on Russia following the crisis in Ukraine.
China would receive 30 billion cubic meters (bcm) of gas per year along the so-called “western” or "Altay" route, according to the agreement. This would supplement the proposed 38 bcm Russian gas to China that would flow through the “Power of Siberia” pipeline, passing along the “eastern route”. The “eastern route” deal, worth $400 billion, was signed in May, and work on the project has already commenced.
Sunday’s agreement is meant to lay the groundwork for a full-fledged contract later. “We have reached an understanding in principle concerning the opening of the western route,” said Mr. Putin, before he flew into Beijing for the APEC summit. “We have already agreed on many technical and commercial aspects of this project, laying a good basis for reaching final arrangements,” he observed.
Aleksey Miller, a senior member of Mr. Putin’s inner circle and head of the energy giant Gazprom, announced that once it materialises, the deal would hedge Moscow’s dependence on the European energy markets. “After we have launched supplies via the “western route,” the volume of gas deliveries to China can exceed the current volumes of export to Europe,” he observed.
Gazprom, Russia’s largest gas company plans to expand the program of import substitution by no longer buying metal and engineering products from more than 400 foreign firms, which could mean $2.5 billion in lost orders from Russia.
As the head of Russian gas giant Gazprom, Alexei Miller, arrives in Athens tomorrow (for talks with Greek PM Tsipras about "current energy issues of interest," which we suspect will include finalizing the "Turkish Stream" pipeline heralded by many as Greece's potential get-out-of-Troika-jail-card), he will face an increasingly anxious European Union. Fresh from its suit against Google, the WSJ reports, the EU's competition regulator plans to file formal antitrust charges against Russia’s state-owned gas company OAO Gazprom on Wednesday. This re-opens a suit from 2012 saying that it suspected the company of abusing its dominant position in those countries’ natural-gas supply.
ROCKMAN wrote:I'll be in Athens on Thursday. Maybe I'll invite Alexei for a brewski and get the skinny directly from him. But more likely I hang in some coffee houses with some old fart Greeks and get a taste of their real sentiment.
radon1 wrote:1. "Russia" does not want to hurt Europe or wage an economic war on Europe. "Russia" wants Europe to prosper, wants friendship with Europe, wants bhai bhai, hugs, beer, vodka and love till the end. "Russia" just does not want to transit NG via Ukraine. This is a relatively minor issue, actually, if all the hype around it is removed.
2. Economic sanctions may indeed hurt Russia far more severely than they hurt Europe. Say, Europe may lose 1% and Russia loses 20% (of exports, GDP etc.). But Russia's tolerance to loss is much higher.
Ulenspiegel wrote:The question to which extend Russia could use NG as effectiv weapon against the EU is IMHO
possible for the EU. Another aspect of this issue is fact that most of the Russian oil exports run through EU/NATO controlled sea lanes. Therefore I do not buy these blackmail scenarios.
radon1 wrote:1. "Russia" does not want to hurt Europe or wage an economic war on Europe. "Russia" wants Europe to prosper, wants friendship with Europe, wants bhai bhai, hugs, beer, vodka and love till the end. "Russia" just does not want to transit NG via Ukraine. This is a relatively minor issue, actually, if all the hype around it is removed.
2. Economic sanctions may indeed hurt Russia far more severely than they hurt Europe. Say, Europe may lose 1% and Russia loses 20% (of exports, GDP etc.). But Russia's tolerance to loss is much higher.
AgentR11 wrote:Russia is going to have to demo that infrastructure on their side of the border that feeds into Ukraine before the EU has its "oh its really happening" moment. Hopefully, they'll do it when EU storage is close to capped to reduce the human suffering involved; but they'll have to do it I think. It has to be an irreversible act, or the EU will believe they can simply pressure Russia into changing its mind.
dissident wrote:http://russia-insider.com/en/eu-versus-gazprom-battle-intensifies-gazprom-looks-set-cut-deal-greece/5968
Nice analysis piece on the EU-crat's obsession with Gazprom. They are messing with the wrong company and
they ignore that it is not their natural gas but property of Russia. The west is full of hypocrites. It yells about
commies but acts like commies when it wants to.
Ulenspiegel wrote:Russia wants money for her NG delivered to Ukraine, not more. To cut pipelines does not bring money. The best they get is EU pays for Russian deliveries.
If they want to punish the EU they would have to reduce the deliveries by North Stream, they don't, we had this discussion before and the facts on the ground have not changed.
In principle, the decision to abandon South Stream is the beginning of the end of Gazprom’s model when the company focused on direct gas deliveries to the end consumer in the European market. If the consumer doesn’t want the goods to be delivered to his home directly, then he has to get dressed and go to the shop. In our case, the shop is the delivery point, which will be on the Turkish-Greek border.
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