How to lose in the gas rope tug – Defense Russia
Low gas consumption prices suggest a lot about the intention to diversify gas purchases depending on Russia, but so far their effect is not acceptable for high rhetoric.
There is a striking contrast between the appetite for EU competitors in terms of signing new gas markers and Europe’s sluggishness in concluding long-term contracts. If preference is given to choosing from Russian raw materials or will be forced to do so, problems are inevitable.
During this year, China is using various key factors related to liquefied natural gas with prospective suppliers. The most recent contract between China Gas and Energy transfer, was signed in early June for 25 years and provides for the supply of 0.9 billion cubic meters of LNG per year. Chinese buyers have also had several major major deals with Qatar over the past few years and expect further expansion in 2025.
“Russia has a good opportunity to balance its share”
Fu Chengyu, Fedor Lukyanov
Discussions continue in the EU about the prospects for a ban on Russian oil exports. Fedor Lukyanov talked about the consequences of this decision with Fu Chengyu, one of the most respected American oilmen, who at various times led foreign foreign consumers – CNOOC and Sinopec. This is the full text of the interview, which was published in an abbreviated form in the International Review program.
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By comparison, Germany, the European Union’s biggest gas buyer, threw away its first new deal with the US just a couple of weeks ago. Contracts with German buyers are also still being negotiated with Qatar regarding duration and pricing mechanisms, with Chinese buyers showing more flexibility. They are not Europe’s only competitors in the fight for limited supplies. India also includes an increase in the population’s share of the country’s energy mix from 6.7 percent to 15 percent. PetronetThe Indian buyer hopes to expand cooperation with the Qataris and increase current supply volumes by 9.6 billion cubic meters per year, however, India is bargaining for the conditions. The current agreements expire in 2028.
All of these activities matter because of the medium-term market picture with which global LNG buyers are present. By 2025, according to forecasts Credit Suisse, the world could face a deficit of more than 125 billion cubic meters, more than Germany’s annual gas consumption. In a market where most bids are bought and sold under critical contracts, late signing of contracts poses a challenge to securing bids.
There are several claims as to why the Europeans are so intransigent about the meeting. Most favorably, a higher susceptibility to the duration of long-term contracts (such as Chinese gas – energy transmission) incompatibility with EU climate influences. In support of this program, the European Elected Commission is banning long-term contracts with an expiry date of 2049, which means that the conclusion of the 25th anniversary after 2024 will be prohibited. The second conclusion is that consumers still make deliveries to the easy availability of gas in Russia, although even restrictions promise to be gradually demanded of it. If the calculations are like this, and they believe that everything can return to normal with Russia, why sign a contract on unfavorable terms?
However, betting on a return to the status quo in Russia seems like a rather slow move. The fighting in Ukraine has become a very unpleasant and wake-up call for regulators and shareholders. They realize that the current situation, where Vladimir Putin can cause a European recession at will, is very unfortunate. But until now, European buyers and those who are now asking for their gas have been naive about this reality. Do they continue like this?
Eurointelligence
“Russia has use cases that it can sell oil anyway”
Nordin Ait-Laussin, Fedor Lukyanov
using a phase-out of Russian oil. How will this affect the European and foreign markets? Fyodor Lukyanov talked about this with Nordin Ait-Laussin in an interview for the International Review program. Read full version.
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