[AgentR11]

http://www.tvc.ru/news/show/id/70099
deputy chairman of "Gazprom" Alexander Medvedev confirms the policy, again.

There will be no renewal of the transit contracts through Ukraine. Period. EOT.

EU may buy through Turkey. Or may find a supplier other than Gazprom.

I think the phrase, "will not under ANY circumstance" is appropriately used in that article.

I still think Russia is going to have to demo the infrastructure on their side of the border with Ukraine before the EU will really believe them. Hope the EU can manage whatever transition they intend to once UA's taps run dry. Though I think it isn't as dire as certain hotheads seem to want to think. If EU manages to max out their storage before UA transit is terminated, and they run North Stream full-out; then I bet that'll give them a good 6-8 months to get the connection through Greece to Turkey up and running before anything horrible happens. As the project won't have waivers on quality, and will have a very rushed schedule, EU rate payers should anticipate the cost being much, much higher than if they built it under normal conditions. But ya know, gotta stick it to them nasty ole Russians.

Of course, EU *could* buy some East Texas gas, yes? We'll import via pipeline and produce locally, pack it up in a nice LNG sphere and then sell at a markup 2-3x what they pay Russia; that'd be awesome too, no? *I* think it'd be awesome, but then again, I might be biased. We probably can't manage the volume, but that'll just make the price that much more juicy.

Bankrupt Gazprom!!! Run em out of business! That'll teach them nasty Russians. GO EU!!! WHOOT WHOOT WHOOT!

[Keith_McClary]

Russia's efforts to bypass Ukraine gas route stall as Saipem deal aborted
$this->bbcode_second_pass_quote('', 'M')OSCOW/MILAN, July 9 (Reuters) - Russia's plans to drop Ukraine eventually as a route for piping its natural gas to Europe have hit a snag after Russian gas exporter Gazprom called off a deal with Italy's Saipem to build a subsea link to Turkey.
...
The now-terminated Saipem contract - worth 2.4 billion euros ($2.7 billion) - is the latest in a string of failed attempts by Gazprom to diminish Ukraine's role in its gas exports.

The cancellation also puts a question mark over Gazprom's goal of building gas pipelines to Turkey and further to southern Europe via the Black Sea with a total capacity of 63 billion cubic metres (bcm) a year, in what would be the world's largest undersea gas infrastructure.

An industry source told Reuters on Wednesday that Gazprom had told pipeline makers to suspend deliveries of pipes for expanding Russia's network so it could be connected to the so-called TurkStream project. Russia and Turkey are yet to agree on terms of the link.

[dissident]

$this->bbcode_second_pass_quote('Keith_McClary', '[')url=http://uk.reuters.com/article/2015/07/09/russia-gazprom-saipem-idUKL8N0ZP2JJ20150709]Russia's efforts to bypass Ukraine gas route stall as Saipem deal aborted[/url]
$this->bbcode_second_pass_quote('', 'M')OSCOW/MILAN, July 9 (Reuters) - Russia's plans to drop Ukraine eventually as a route for piping its natural gas to Europe have hit a snag after Russian gas exporter Gazprom called off a deal with Italy's Saipem to build a subsea link to Turkey.
...
The now-terminated Saipem contract - worth 2.4 billion euros ($2.7 billion) - is the latest in a string of failed attempts by Gazprom to diminish Ukraine's role in its gas exports.

The cancellation also puts a question mark over Gazprom's goal of building gas pipelines to Turkey and further to southern Europe via the Black Sea with a total capacity of 63 billion cubic metres (bcm) a year, in what would be the world's largest undersea gas infrastructure.

An industry source told Reuters on Wednesday that Gazprom had told pipeline makers to suspend deliveries of pipes for expanding Russia's network so it could be connected to the so-called TurkStream project. Russia and Turkey are yet to agree on terms of the link.

[Withnail]

$this->bbcode_second_pass_quote('', 'B')ank of America Merrill Lynch said in a note that Gazprom should reject plans to lay costly undersea gas pipelines and engage with Ukraine instead.

"We believe that a better solution for Gazprom would be to join forces with the EU and Ukraine to upgrade Ukraine's existing infrastructure," it said.

[Tanada]

$this->bbcode_second_pass_quote('Withnail', '')$this->bbcode_second_pass_quote('', 'B')ank of America Merrill Lynch said in a note that Gazprom should reject plans to lay costly undersea gas pipelines and engage with Ukraine instead.

"We believe that a better solution for Gazprom would be to join forces with the EU and Ukraine to upgrade Ukraine's existing infrastructure," it said.

[ROCKMAN]

T - There are even more effective methods. Pipeline repairs don't take much time or effort. But all pipelines have control systems built into them. They might be pumping station, pressure control systems, etc. Knock them out and the pipeline could be out of service for weeks or months just waiting for the replacement equipment. Granted there's a volume of EU NG storage available but then the politics come into play: who gets what's available? And then there's the psychological aspect: disrupting NG flow would be more of a terror inducing goal then a significant disruption of BAU. And folks under such pressure might make some moves that are even more disruptive then the temporary loss of NG supplies.

[Withnail]

$this->bbcode_second_pass_quote('Tanada', '')$this->bbcode_second_pass_quote('Withnail', '')$this->bbcode_second_pass_quote('', 'B')ank of America Merrill Lynch said in a note that Gazprom should reject plans to lay costly undersea gas pipelines and engage with Ukraine instead.

"We believe that a better solution for Gazprom would be to join forces with the EU and Ukraine to upgrade Ukraine's existing infrastructure," it said.

[Keith_McClary]

Hub firm aims to wean Ukraine off Russian gas
$this->bbcode_second_pass_quote('', 'A') Boston firm is working to build nearly two dozen biofuel factories in Ukraine to help reduce the war-torn country’s reliance on Russian natural gas.

“These people are suffering, their lives have turned to mud and dirt,” said Rod Robertson, chief executive of the Ukraine Agro Valley Association. “We’re not on the Kremlin’s Christmas card list for doing this.”

The association plans to build 20 factories across the country that would make biofuel pellets made from a crop called miscanthus. Each factory would be surrounded by 10,000 acres of farmland for the crops. Miscanthus, which is similar to corn, would be harvested, dried and compressed to make pellets that can be burned for fuel. Miscanthus is widely regarded as one of the best crops to make biofuels with, Robertson said, but it initially will have to be brought into the country.

The pellets could be used to heat buildings and eventually run power plants, he said.

“It burns 10 times brighter than straw,” Robertson said.

The heat and power generated by the pellets that 20 factories and 200,000 acres of miscanthus could produce will make a real impact on where the country gets most of its energy.

“It conceivably could generate enough electricity in the large cities,” he said.

Each factory will cost roughly $20 million to build. The association is hoping to find the $400 million necessary for the 20 factories through U.S. and European government funding.

Ukraine has been trying to reduce its dependence on Russia for natural gas after the conflict in Crimea. The country gets much of its gas from Russia, and the ability to heat homes and power buildings is often at the whim of Russian leaders. Earlier this year, Ukraine stopped buying natural gas from Russia after a price dispute amid an ongoing territorial dispute. Russia annexed Crimea and is accused of supporting eastern Ukraine’s ethnic Russian separatists.

“These people are going to have a hard time heating their homes in the winter, it’s survival for these people,” Robertson said. “The whole country needs it.”

He said the factories are likely to begin operating by 2017, but the crops need to be planted a year before.

“We would like to start building factories, we would like to the get the funding in place by the end of this year,” he said. “This is one of the biggest talked-about projects in the Ukraine.”

[AgentR11]

Err.. not to piddle on the biofuel thing too much, but doesn't that just moot the only asset value Ukraine had with respect to the EU. ie, its biggest plus from the EU viewpoint was good farmland, close by, but not tightly bound to European restrictions on GMO and other modern industrial ag type stuff.

If you end up using that good farmland to grow a crop to be burned for fuel.. it won't be growing grain to eat; which would be kinda a shame, as that land is some of the best food grain producing dirt around.

Second issue I have, scale seems tiny... and reads more like a piece for Ukrainian consumption where they feel the need to exhibit some development that appears to advance their interests and sticks it to Russia; though how such a small effort will make more than a decimal point on Gazprom's ledger baffles me.

Thirdly.... and biggest. Heating using electricity is extremely inefficient; so i have to assume they're thinking they'll be doing thermal power for the big housing blocks; but UA's infrastructure for that stuff makes Soviet era practice look to be the pinnacle of efficiency and quality. Poorly maintained systems are poor candidates for changing generation; I'm thinking they don't need 20 million per factory.. They need 20 million for the plant, and 200 million for the refurbishment of infrastructure required to get any bang out of each new plant.

qed... They're fishing for grant money.

No. The real answer is simple. UA will buy gas from Germany. Germany will not put up with failure to pay the bills; thus, UA will actually pay for the gas UA burns, and they'll likely have to auction off every peasant's small farm in the country to NamelessCorporateBeast to make the check not bounce. Germany of course, will buy gas from everyone, for use and resale, including a bajigaton from Russia.

[dissident]

One has to admire the chutzpah of the NATO media. To use the term "war torn" to describe Ukraine is a brazen lie. The only part that is war torn is the ethnic Russian enclave in the Donbas bordering Russia. It is a tiny part of Ukraine's territory. This enclave is being subjected to a war of terror by the Kiev coup regime which shells civilians 24/7. So all the "tearing" is done by NATO-backed Kiev. Nobody is shelling Kiev or even any Kiev controlled population point in the Donbas (there was the incident several months ago in Mariupol, but given the fact that it was the only one during the whole period of the war it smells of a psyop.)

[ROCKMAN]

Buying NG from Germany? Of course since it's a major producer. No...wait...they also import Russian NG. So Germany could buy NG from Russia and take delivery and then get paid inadvance what Germany paid for it plus the additional cost of piping the NG back to U. Which might also include any additional cost for that new infrastructure.

A simpler and probably cheaper approach: Germany signs long term delivery contracts for their demand along with the U demand. The Germans pay the Russians for all the NG...color the Russuans happy. Germany has THEIR NG delivered directly to the U distribution sysytem...color the Ukrainians happy. And the U pays the Germans for what it cost them to buy the Russian NG...color the Germans happy. Of course if the U doesn't keep up their payments...color the Germans increasingly unhappy. And eventually Germany might suspend the delivery of THEIR NG to the U. Color the U unhappy once again. And who stays happy no matter what: thd Russians because the Germans will still honor theit long term purchase contracts with Russia.

BTW this isn't a brainchild of the Rockman: such trades have been done in the US for many, many decades.

[Ulenspiegel]

Rockman,

the Germans only pay for NG via Ukraine that passes the Polish border, guess why.

[dissident]

For all the EU yapping about weaning itself off Russian gas via LNG, it is clear that no such thing is happening.

[ROCKMAN]

U - That'e exactly the point I'm trying to make: the sale of Russian NG will be wherr they say it will be. IOW if Russia says they'll sell Germany its NG based upon the meter at the Russian border or they don't get to buy any what would the Germans do? As explained before every NG producer in the US sells production on that basis. I couldn't care less if the end user pays or not: I've got my money. LOL.

[ROCKMAN]

I thought the sanctions against Russia was supposed to hurt their NG industry? Also recall that oil revenue to the industry is essentially the same today as before the price collapse. The Russian govt lowers the tax rate as oil prices decline so the oil producers are receiving about the same net revenue at $50/bbl as they were at $90/bbl. Given how much Putin and his buddies skim of the industry he must be crying all the way to the bank. LOL.

Reuters - Russia's top natural gas producer Gazprom said on Monday its net profit rose 50 percent year-on-year to 675.9 billion roubles ($10.5 billion) in the first half of 2015, thanks to increased sales and a weaker rouble. Revenue for January through June edged up 1.4 percent to 2.9 trillion roubles, the company said, noting: "The increase in sales is mainly driven by an increase in gas sales to Europe and other countries." Gazprom's revenue has increased on the back of a falling rouble, while sales volume declined amid sluggish demand. Supplies to Europe and other countries fell 6.5 percent to 80.4 billion cubic metres in the first six months of the year. The company is facing stiff competition at home from other gas producers such as Rosneft and Novatek, while its production is set to hit a new all-time low this year. Gazprom also said its second-quarter earnings rose 29 percent to 293.79 billion roubles, beating an average forecast of 260.6 billion from analysts polled by Reuters. The company, restricted from borrowing by Western sanctions over Moscow's role in the Ukraine crisis, said it raised a $1.5 billion five-year loan from a bank consortium at Libor plus 3.5 percent. ($1 = 64.4710 roubles)

[Ulenspiegel]

Rockman, when Gazprom - with lower volumes sold and lower price per barrel in USD - get higher earnings in rouble, then my gess is the USD became more expensive for them.

A few years ago Gasprom was worth four times its current value. BTW They are again trying to get the BASF deal through, interesting times.

[radon1]

Btw, Rosneft and other Russian oil cos have managed to maintain their profitability due to the devaluation of ruble and the so-called "tax maneuver". Their shares are up since the beginning of the year in dollar terms while the western oil cos have plunged dozens of the percentage points.

As the population foots the bill, some are flourishing.

[dissident]

$this->bbcode_second_pass_quote('radon1', 'B')tw, Rosneft and other Russian oil cos have managed to maintain their profitability due to the devaluation of ruble and the so-called "tax maneuver". Their shares are up since the beginning of the year in dollar terms while the western oil cos have plunged dozens of the percentage points.

As the population foots the bill, some are flourishing.

[americandream]

$this->bbcode_second_pass_quote('radon1', 'B')tw, Rosneft and other Russian oil cos have managed to maintain their profitability due to the devaluation of ruble and the so-called "tax maneuver". Their shares are up since the beginning of the year in dollar terms while the western oil cos have plunged dozens of the percentage points.

As the population foots the bill, some are flourishing.

[radon1]

$this->bbcode_second_pass_quote('americandream', '
') So when they ran a collectivised society, that was not good enough. Now they are free to earn what they will as is the case in the West, that is still not good enough.