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Russia’s Power Of Siberia Pipeline May Slow Down LNG Supply To China

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Russia's Power Of Siberia Pipeline May Slow Down LNG Supply To China

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The Power of Siberia pipeline would slow down liquefied natural gas (LNG) supplies to China, EADaily reported.

Experts believe that Australia will suffer more than others, which continues to increase exports to China, its shipments have increased by 61%, for example, in April 2019. The United States is not yet considering increasing its exports, because due to the trade war and the introduction of 25 percent duties, thus LNG (or as they like to call it “freedom gas”) imports from the United States fell to a minimum.

In 2018, China’s LNG imports reached a new record high.

China imported 53.7 million tons of LNG in 2018, a rise of almost 38% compared to 2017 when China surpassed South Korea as the world’s second largest LNG importer.

In December 2018 alone, Chinese LNG imports rose 25.9 percent to 6.29 million tons, logging a record for monthly LNG imports.

Currently, China is the second biggest LNG importer, after Japan, but it could likely overtake it by 2022.

By then, LNG imports in Japan are expected to decline 12%to 72.8 million tons per annum (mmtpa) compared to 2018, while China’s import volume rises 37.5% to 74.1 mmtpa.

In 2018, China began to actively switch from coal generation to gas and the consumption of blue fuel in the country grew by 19% to 280 billion cubic meters. Of these, 124 billion amounted to imports. It soared to 30 billion cubic meters and mainly due to LNG. Supplies of liquefied gas increased by 42% – to 74 billion cubic meters. The largest supplier was Australia. It provided 42% of LNG for China. This year, growth continued. But experts argue that this upwards tendency wouldn’t continue for long.

Russia's Power Of Siberia Pipeline May Slow Down LNG Supply To China

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Associate Professor Jin Lei, of China University of Petroleum-Beijing believes that the era of Russian pipeline gas is coming, which will stop the expansion of LNG.

“Australia (the largest supplier) will face serious difficulties when the Russian gas pipeline runs,” he told the Global Times. “The advantage of pipeline gas prices over LNG costs will squeeze the LNG market.”

In 2014, Russia and China signed a $400 billion deal on the supply of 38 billion cubic meters of natural gas over a period of 30 years.

China’s key sources for LNG are in Southeast Asia, Australia and Qatar.

For pipeline gas, China has currently two arteries channeling gas from Turkmenistan and Myanmar to feed its natural gas demand.

“The world’s major consumption market for LNG is limited. With three pipelines in place and functioning, China’s growing demand for natural gas can be met,” Jin said.

Last year, China received 47 billion cubic meters through a gas pipeline from Turkmenistan, Uzbekistan and Kazakhstan. Smaller volumes came from Myanmar.

Deliveries from Russia will almost double pipeline imports – by 38 billion cubic meters, but no immediately. The Power of Siberia will reach its designed capacity in 2025, and in 2022, for example, deliveries will amount to 16 billion cubic meters.

Nevertheless, the entry of Russian pipeline gas to China has already been taken into account at the International Energy Agency (IEA). Gas analyst Jean-Baptist Dubreul believes that by 2024, LNG imports to China will reach 109 billion cubic meters. Which is 38% growth over 5 years.

Another threat to LNG is the fourth gas pipeline from Turkmenistan, through which China will be able to receive another 25-30 billion cubic meters.

Although, as Aleksey Grivach, Deputy Director of the National Energy Security Fund (NESF), noted, there is no clarity regarding the pipeline in question.

“Three lines have already been built and loaded almost at a design capacity of 55 billion cubic meters per year. There is no clarity with the fourth (along the new route),” the expert said.

At the same time, the deputy director of the NESF believes that the main threat to LNG is not even in Russian pipeline gas.

“As for the “Power of Siberia”, to a large extent it will satisfy the demand in a new area of consumption – in northeastern China. The main threat to LNG and the overall pace of development of the gas market in China is the economic situation in the country and the trade war between Beijing and Washington,” said Aleksei Grivach.

Alexey Kalachev, an analyst at FINAM JSC, notes that the growth in consumption in China will be noticeable in any case and there will be enough room on the gas market for all exporters if they offer a competitive price.

“A more serious threat to gas exporters is China’s plans to increase its own production. Last year, China’s own gas production already grew to 161 billion cubic meters, and by the end of 2020 the goal is to reach 360 billion cubic meters,” Alexey Kalachev noted.

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occupybacon

How is Nord Stream II going? :D

grumpy_carpenter

On time and on budget apparently. Danish permits are on the CP. This milestone doesn’t affect completion until October. If they don’t get permits they have to re-route outside of Danish waters. Minnow at the EU and the USA want to block the pipeline but Germany and Russia both want it and given the choice between keeping EU minnows happy and keeping the German economy humming …. the EU needs the German economy much more than concerns over Polish security and the Germans want no part of US LNG at twice the price. Either way the Russian gas transiting the Ukraine will be cut by 85% on Dec.31 …. Russia is apparently stockpiling gas in Germany in case the project is delayed.

Brother Ma

Cp? What is that Grumpy?

grumpy_carpenter

Critical path

BMWA1

W/o German industry, there is no EU.

Harry Smith

Germany is one of the main competitors with the USA. Making Germany pay more for energy, which will increase the cost of German products, is a strategical task for the Washington.

AM Hants

Do you remember the Russian sanctions, back in 2014? The US set them, the EU followed the orders and yet, the US did OK, it did not effect trade. Russia became self dependent and the EU lost $billions.

occupybacon

Since 2014 Russia lost it’s “emerging economy” statute which requires 5% annual growth. Last year was 1.5% and this year prognoses are 1.3 – 1.8%. In comparison US prognoses is 2.4-3.2% growth rate. EU growth was all this years 1.2-1.5%, no changes with the sanctions, you are repeating what Putin told you that EU lost, meanwhile Russians are begging for mercy with each occasion

AM Hants

LOL, credit rating agencies that are controlled by the Rothschilds, believe that the US is AAA+ and didn’t they give Ukraine a good right up?

Prefer my own version, which consists of whether a nation can balance her books. Learnt my lesson, when none of the credit agencies managed to forecast the economic crash of 2007-2008.

With Russia, more comes into her bank account, then goes out. So she gets my vote, if I was looking for a nation to invest in. Minimal debt, in control of vast supply of natural resources, creditor nation, which can afford to feed their people, with own produce, provide free medical healthcare, together with free education, upto University Level. Not forgetting the healthy currency and gold reserves.

By the way, not on intimate terms with President Putin, so he told me nought. However, do like world debt clock says a lot, in between ticking.

comment image

occupybacon

Let’s start with “free medical healthcare”, the average Russian lives with 7 years less than the average American. It’s just 10% of life. Great Free Health Care, Russia !

Second, how many Americans migrated to Russia, how many Russians migrate anally in USA? You said you would invest in Russia. Most Russians would live it for USA in a blink if they got the US Visa.

And lastly, did you know that in the US debt they add the inflation, while other countries don’t? That makes around third of the US debt.

Another third of the US debt is owned to banks – which can be erased any time like Greece did. After all it’s their banks. Fact: US Debt/GDP is 5 times smaller than Greece Debt/GDP when Greece debt got partly erased by the banks.

They also have a small part of the debt owned by other nations. What do you think, will China go take its own debt by force? They declared bankruptcy in 70’s and fucked both Japan and Germany with their US owned debt.

BTW do you have different economic ratings/numbers proposed by Russian economists?

Harry Smith

Well bacon, you forget some points in your analysis:
1. In 70s USA had 15 millions of food stamps consumers, while in 2018 the number is 40 millions. What they gonna do if Govt., because of bankruptcy, will cut the food stamps program?
2. Since 2011, white Europeans, underlining – Europeans and not Caucasians, are the ethnic minority. Would the USA majority behavior be the same like it was in 30s and even in 70s?
3. The real industry in USA is dead.
4. The agriculture is controlled by corporations like Monsanto (or whatever they are now)
5. Most of USA day by day payment operations are made with bank cards and not in cash. That means if banks will crush, most of USA inhabitants will remain without money.
6. Because of S-510 federal law, USA inhabitants can not grow food on their backyards.

There are a lot of other points, but they are mostly macroeconomical, so I thought you wouldn’t be interested in them. Anyway, the 6 points above, are more than enough to imagine what it will be like, when USA economy will fall.

Sinbad2

One third of US GDP is Government spending, using money they borrow.
The US economy has been fkd since 2008, and no amount of borrowing and zero interest rates will unfukit

occupybacon

They borrow from whom?

Sinbad2

I don’t know the exact details but currently Government debt is 23 trillion and rising by over a trillion a year.

I’m guessing that a lot of it is from peoples pensions.

occupybacon

That is partially true but all the states do that. However it’s not the largest part of the debt, you should read a bit before creating high hopes (that US is collapsing in a few) because the greatest disappointments originates in the greatest expectations ;)

Luke Hemmming

the us government issues treasury bonds and sells them on the bond market so basically if you buy these bonds you are buying US government debt. this is done with the belief that the US govt is good for paying back the value of the bonds when the buyer sells them back onto the market. here lies the problem thou. The USA government does not earn enough in tax revenue, exports or other income streams to be able to pay back ALL those bonds issued without damaging the value and integrity of the US currency as a reliable and sound currency to trade with and it more than likely would cause panic in the markets and help in a global economic collapse.

occupybacon

Yeah I think that already happened in 70’s

Sinbad2

Does it matter, a bum who can’t support himself and pay his bills is still a bum.

occupybacon

So your hopes that US economy will fall soon, don’t require any studies, typical communist false hopes.

Sinbad2

You can babble shit until the cows come home, but the bottom line is Russia/China is winning, USA is losing.

Harry Smith

There is another point. Since EU bureaucracy took control over the gas supply, EU gas market became monopsony for Gasprom. That’s why they can dictate their conditions. Once Power of Siberia starts to function, Russia gets an alternative route for gas sells. So Gasprom won’t be dependent of one buyer.

AM Hants

Beauty of those sanctions, how they bought China and Russia together.

Going back to 2014, Yanukovich stands down, witnessed by the Germany, Poland and France (or was it France). Yet, they had no problems, when he agreed terms and within hours, him and his family were rescued by Russia, owing to an assassination attempt. Was it the following day, that Ukraine sent the gold to the US?

Crimea, following the Korsun Massacre and politicians, stating they wished to nuke the 8 million, Russian speaking citizens of Ukraine, voted to return to Russia, before the EU could hold an emergency meeting.

Sanctions followed, with Russia retaliating, and taking out the EU agricultural market. How the trolls laughed, yet, the EU will never get the market back, as the French Farmers now realise. How many $billions, did it cost the EU, to support the US sanctions?

Next came Gazprom. With Ukraine, time and time again, refusing to pay their bills, believing they could carry on, with full EU support. Then the EU freaked out, when Russia pulled the plug on Ukraine gas and demanded pre-payment.

Rothschild then purchased Naftogaz, on condition that it remained full of Russian Gas, until the Israel to Europe gas supplies are up and running.

The EU cannot understand why Ukraine will have no gas in her pipework, come December 2019. They just cannot work out that Russia says something, then delivers. Unlike, the EU mode of business.

Exxon pulled out of the Siberian gas fields, believing that Russia would not be able to have access to the heavy drilling technology that Exxon would be supplying. Russia, went inhouse, and developed her own technology. They also believed, that Russia would not be able to find investors, to help with the initial costs. Then along came China.

Not just the $400 billion worth of gas contracts, going back to 2014.

The Yamal LNG plant was not meant to happen. Let alone, for the Yamal Plant to provide the UK and US with LNG gas, when they had insufficient to warm the nations, during a cold spell period.

Let’s not get started on Russian Defence, which again, has left so many in shock and awe and there is nought the EU can do about any of it, let, alone the US. Not forgetting Australia has found the Chinese will no longer need so much of their LNG, once Russian pipelines bring in the Siberian gas. Oh dear.

From Russia With Love: A Super-Chilled Prize for China… https://www.bloomberg.com/news/articles/2017-10-26/china-to-get-first-yamal-lng-cargo-as-russia-says-thank-you

Harry Smith

Well, there is something that I never read in Western news outlets. At the July 22, Medvedev signed an order (too lazy now to find the proper translation) to start negotiations between Russian and Chinese ministries of defense about military cooperation. Here is the original document in Russian:
http://publication.pravo.gov.ru/Document/View/0001201907220004
I am not a military man, but on the couple of military related Telegram channels it was estimated as a huge step forward for the real military alliance.

Sinbad2

Energy independence is a red line for Germany, the US is driving Germany into the arms of Russia.
A hundred years from now the USA will be known as the stupid or barbarian empire.

Harry Smith

The real geopolitical nightmare for the USA is the strong alliance between Russia and China. Germany is very important but has no strategic importance.

Concrete Mike

I will respectfully diasgree.

Germany is very strategic, remember the 2 wars faught last century?

Harry Smith
AM Hants

The only problem, they have a route to bypass it and still the EU cannot touch it. Owing to how Russia tied up the contracts, keeping them well and truly out of the loop.

When does Ukraine lose the transit pipelines? Isn’t it later in the year?

occupybacon

If you are able to read a map, , it can’t round Danish waters, it still needs to go through Danish exclusive economic zone which requires permit from European parliament – which voted against it with 400-100 and 80 abstentions. The company which is building the pipe said it will turn to an International Tribunal to sue – Good Luck with that! That’s why Putin is visiting Macron to try to bribe him to support the streams. I hope the vote will be the same with Turkish Stream.

Sinbad2

So I guess the lights will go out in Europe?
Do you think factories closing all over Europe because of lack of energy might have some economic consequences?

The contract with Ukraine expires at the end of the year, and Russia will demand a better deal, if Northstream doesn’t supply the gas, where will they get it, the US simply does not have enough gas or tankers to make up for the loss of Russian gas.
When the EU collapses, and takes the US with it, Russia can honestly say we tried.

You simply cannot see the end game, which is either way Russia wins.

occupybacon

Yeah, the world will turn into zombie apocalypse without Russia. Just go unite with China and form Eurasia with capital at Beijing. Siberia will be Chinese anyway. LNG is just 20-25% more expensive than Russian gas and with the bigger facilities constructing at this moment in France and Nederlands, the difference is expected to be reduced at 10%-15%. Is it worth? EU commercial balance with US is +$120 Billion, Germany alone getting $60 Billion profit, mostly from cars exports. USA can say: you don’t buy our LNG, we don’t buy your cars, simple as this.

One more thing: the LNG import to EU is growing with 7% per year, for the last 5 years. USA plans to accelerate it and declared it national interest.

Sinbad2

You just refuse to accept the reality that is right before your eyes.
Europe and China are now the biggest trade partners, America is like the incredible shrinking man, with the ego of the Hulk.
America is done, it’s a dead man walking.

There are non so blind as those who will not see.

occupybacon

If it was done, it haven’t 100 million cockroaches like you obsessed by it. USA has the largest base of haters for one good reason: I’s strong as fuck. The dead man waling is the Russian project Nord Stream 2

Sinbad2

So why do you think so much of the world hates the USA and Jews?

As Henry Kissinger once quipped any people that have been persecuted for 2000 years must be doing something wrong.

Harry Smith

Danish EEZ is not territorial waters. I would suggest you to read more about freedom of navigation.

Harry Smith

After the approval process dragged on for more than two years, Nord Stream 2 AG, the company building a €9.5bn pipeline to carry natural gas from Russia under the Baltic Sea to Germany, has withdrawn its application to lay pipe in Danish territorial waters.
The full story is here:
http://www.globalconstructionreview.com/news/nord-stream-2-abandons-quest-lay-pipeline-danish-t/

grumpy_carpenter

Thanks for posting that article. This article you posted is dated July 2. I read a Financial Times (FT) article dated July 27 that said the Danish permit was still an issue.

The Financial Times is a UK publication that promotes globalism and free enterprise while the Global Construction Review is published by the UK’s Chartered Institute of Building which is an organization that represents construction managers.

My gut says the article you posted got the story right. Globalists can play fast and loose with the facts around contracting however publications like the Global Construction Review have a lot to lose if they get their facts wrong so I tend to trust your source despite the earlier date. Their audience relies on this information to formulate their business strategies so if they publish falsehoods then they lose readership.

Harry Smith

I read a lot of news about it in Russian media.

AM Hants

Reminds me of Bulgaria and the South Stream. They played up, keeping the US happy. Now freaking out, owing to all they missed out on, when Russia found other customers.

occupybacon

That was US and Germany that lobbied against the Bulgarian pipe in EU parliament, now is time for Germoney to take a shot of their own medicine.

Harry Smith

Do not worry, little Bulgarian, Germany will screw your country even smother then Russia. So your destiny is to buy gas as much, as Turkey will allow you.

AM Hants

Weren’t the US trying everything they could, to make sure that Europe would be without gas, by January 2020? If Ukraine could not keep the transit pipelines filled with Russian Gas. They would then brand Russia, unreliable suppliers and jump in ready, with their LNG (no doubt, much of it provided by Russia).

No doubt, one of the reasons the Dutch Foreign Minister was trying to delay things.

Sinbad2

What shows the total lack of intelligence by the Americans is even if they stopped the piped gas, Russian LNG would be cheaper.
I guess they assume they can force the Europeans to pay more?

Harry Smith

Russian LNG not only cheaper, but it is faster to ship.

occupybacon

…no doubt, much of it provided by Russia’s gas but exploited by Exxon

Sinbad2

No gas for Denmark.

occupybacon

LNG is gas too. And it helps export products to USA. Russia is poor, they can’t buy much from Denmark.

grumpy_carpenter

Russia is under EU sanction …. there’s not much they are allowed to buy from Denmark. Nordstream II isn’t a Russian project. The project itself is a consortium of 6 oil and gas companies only one of which …. gazprom …..is Russian. The other investors are the major players in European gas distribution including Shell.

So to be clear the USA is leading the political fight against the largest gas distributors in Europe to deny them their considerable investment in the Russian pipeline and replace it with US sourced LNG at twice the price.

If the USA is successful it will drive up the cost of energy and do sever damage to Germany’s economy as well as every other nation in western Europe but on the flip side the Ukrainians will get their $3b transit fees (except they won’t because Russia is cutting them off on Dec 31 whether Nordstream II gets built or not)

Do you really think the European industrialists will let the USA drive their economy into recession so US companies can sell gas no one else in the world wants and EU energy companies will let their $10b investment just go up in smoke without a fight? Dream on.

Sinbad2

Texas exports gas, New York buys gas from Russia, because the US can’t/won’t build a pipeline.
The US burns most of its gas at the well, because it can’t/won’t build pipelines to consumers.
So no matter what the problems with North stream it’s still a vast improvement on burning coal and cow dung.

Sinbad2

Australia won’t suffer, Australia gets about $10 million a year from gas sales, Chevron will suffer.

Luke Hemmming

I’m also hoping that maybe just maybe local gas prices may drop a bit due to having excess gas in the market as we know here in Australia we Australians pay more for gas than say the Japanese for example. But I think that is wishful thinking on my behalf. or paraphrasing the castle line movie line ‘tell him he’s dreaming’. ?

Sinbad2

We are as stupid as the Americans, huge gas reserves, but no pipeline to get it to consumers.

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