Ulenspiegel wrote:The South Stream issue was that Russia and a few EU members pursued a strategy that was not within the EU law, then came the brutal warning shot from Brussel. That's life.
True enough. But that does not imply that Russia has to sell their gas to the EU. Russia's response is apparently that if the EU wants to buy Russian gas, they can buy it through pathways that do not cross Ukraine. Russia's even being nice about telling the EU where additional gas will be available in 2019. Yall have plenty of time to build pipelines to Turkey, if you want to buy Russian gas. So, its really up to the EU now as to whether they want to buy from/via Turkey or bring in LNG from Yamal or East Texas (hopefully for a hideously wonderful premium of course) or wherever else. (I was studying up on Yamal last week, that's been a pretty cool project so far, and Global Warming will only further enhance its value).
I'm pretty sure the Russians mean it. Russian gas will not transit Ukraine in 2019. Yall don't pay enough of a premium to make putting up with Ukrainian behavior worth it. From the Russian Federal POV.
Honestly, I'd be completely unsurprised if Putin made it physically impossible to ship gas via Ukraine in and after 2019. A little Chechen terrorism and a lot of Russian bureaucracy, EZ-PZ. Chechen's are crazy enough to think they know what's best for Russia, even if Putin only casually suggests such a thing while fishing shirtless with his buddies. Or maybe even an "unsuccessful" demonstration in 2017, early 2018?
BTW Russia has to sell NG, therefore, her bargain power is still quite limited.
1. Assertion not in evidence. NO they do NOT have to sell it. They can burn it, vent it, cap it, make fertilizer out of it, etc. Free market requires a willing buyer *AND* a willing seller. Absent the willing seller, there is no sale. The problem here is that the buyer doesn't understand what the seller wants and thinks its just a matter of paying the right number of Euros. Its gone beyond that now. Things have degraded to the point that the seller will accept a (much) lower number of Euros as long as it is Euros-without-Drama. (or in this case renminbi without drama! lol)
2. They will be able to sell it to someone else. The links to the fields that currently feed the EU will also feed to China by then. If China can get an excellent discount in the process in exchange for zero-drama, that's win-win for China and Russia. Of course, that'll reduce China Inc cost basis, and radically increase EU manufacturing cost basis.. Not so good if you care about your manufacturing goods competing in the world market.
nb... To NATO trolls, I dislike Russia and Ukraine equally strongly. I'm seriously disappointed that we've compromised easy European energy security over the corrupt, racist, inefficient mud flat known as Ukraine, while in the process of failing to acquire Sevastopol for my future retirement sailing excursions. I mean seriously, look at any picture of that beautiful port and note the serious NON_EXISTENCE of sailboats on the water; its a crime against humanity.