The Altay Pipeline: A Geopolitical Game Changer

Source: BP Statistical Review of World Energy 2018.

 

It is a matter of common knowledge that energy relations between Russia and China have boomed in the past decade, with all sorts of new infrastructure being built to facilitate the ever-further expansion of bilateral energy trade. Yet it has seemed for some time now that new gas projects are very unlikely to happen – the 38 BCm per year Power of Siberia pipeline will go onstream December 20, 2019 and seemed to satiate China‘s needs for Russian gas – but that has now changed. A second project, generally denoted as the Altay pipeline (sometimes also mentioned as Power of Siberia-2), which had been stalled for four years due to limited demand and Gazprom’s sanctions-induced constraints, is set to be the next big Russo-Chinese gas project.

Russia Just Won Big In The European Gas War

 

There’s been a lot of talk on both sides of the Atlantic about the U.S. pivot and efforts at locking in natural as market share in Europe. Much of this comes amid President Donald Trump’s so-called American energy independence push as well as both U.S. and several EU members thrust to wean Europe off of geopolitically charged Russian gas.

In fact, Trump has pushed for U.S.-sourced LNG to become so much of the EU’s energy security that several European states, particularly Germany, have accused the president of playing energy geopolitics, cloaking American concern for European energy security under the guise and to the benefit of U.S. LNG producers.

Now, however, Trump and U.S. LNG exporters will have an even harder time convincing key EU members to offset overreliance on Russian piped gas with U.S. LNG.

Germany starts to build Nord Stream 2

Danish and Swedish permits still pending (Photo: nord-stream2.com)

 

Germany has started to pour concrete on a Russian gas pipeline that risks dividing the EU and harming its energy security.

The construction began in Lubmin, on Germany’s Baltic Sea coast, on Thursday (3 May), with the laying of foundations for a terminal that will receive 55bn cubic metres (bcm) a year of Russian gas via the Nord Stream 2 pipeline when it goes online in 2020.

EU “Sounds Alarm” Over New US Sanctions On Russia; Germany Threatens Retaliation

Late on Friday, Congressional negotiators reached a deal to advance a bill that would punish Russia for its interference in the 2016 election and restrict the president’s power to remove sanctions on Moscow, according to the WSJ. The measure, if signed into law, will also give Congress veto powers to block any easing of Russian sanctions by the president. And while it remained unclear if President Donald Trump would sign the bill if it reaches his desk, which is now likely, the loudest complaint about the bill to date has emerged noe from the Oval Office, but from Brussels, after the EU once again urged (and warned, and threatened) US lawmakers to coordinate their anti-Russia actions with European partners, or else.

Turkey Having Trouble Finding Alternatives To Russian Gas

With Russian-Turkish relations bottoming out after Turkey’s downing of a Russian military jet last November, Ankara is scrambling to reduce its dependency on Russian gas. But the help it needs from post-Soviet energy producers may not be swift in coming.

The Caspian Sea state of Azerbaijan, Turkey’s closest ally in the post-Soviet region, was the first place Turkish Prime Minister Ahmet Davuto?lu [sic] visited after the November 24 downing incident. And most recently, Davuto?lu [sic] met with Azerbaijani President Ilham Aliyev in Davos on January 20.

“Two nations, one people” is a popular mantra that officials in both Turkey and Azerbaijan use to describe their relationship. And yet when it comes to energy, there seems to be limits to this unity.

War Drums: Gazprom’s Dangerous New Nord Stream Gas Pipeline to Germany

Does the latest Russian-German deal reflect the spirit of Molotov-Ribbentrop?

Russian state-owned gas giant Gazprom signed a deal June 18 to double the capacity of the Nord Stream gas pipeline that delivers Russian gas directly to Germany. The deal is a precursor to war.

Analysts are wondering: Why would Germany continue to work with Russia’s Gazprom when it is supposedly targeting Russia for its invasion and occupation of Ukraine?

When asked how he convinced Germany’s E.ON, Austria’s omv and British-based Royal Dutch Shell to do business with Gazprom, chief executive Alexei Miller said: “As far as Nord Stream is concerned—there was no politics at all. The decision was taken in November 2011, and all the work has been done based on the decisions taken three years ago.”

Greece to invest $2 bn in Turkish Stream, will sign memorandum asap – Energy Minister

This is why it’s oft said here that Greece will not be going anywhere. They’re too strategically important for Europe and will likely become the energy hub for the continent — whether they transit supplies from Cyprus, Russia or wherever else. In a worst case scenario, Greece will be part of a periphery economy should the EU restructure itself.

Ironically, Greece says it cannot meet its next payment due to the IMF June 5th. You can see the payment calender HERE.

 

Greece plans to sign a document on political support for Gazprom’s Turkish Stream project at the St. Petersburg International Economic Forum in June, its Energy Minister announced on Monday. The country plans to invest $2 billion in its construction.

A memorandum on political support for the gas pipeline project will be prepared by June 18-20, when the International Economic Forum (SPIEF-2015) will be held in Russia’s St. Petersburg, Greek Energy Minister Panagiotis Lafazanis announced on Monday.

Power play: Why is Greece flirting with the Russians?

Fear is running amok yet again that the cash-strapped Greek government will default on its loans to its European partners and the International Monetary Fund. While its fate is still unknown, one thing has become clear this week: Greeks are scrambling to find assistance from wherever they can find it—its own government’s coffers, and even with overtures to Washington and Moscow.

A signal of how dire the situation is: The far-left government passed an edict Monday requiring public agencies to turn over idle reserves to the Greek central bank to help plug fiscal gaps. In addition, come Friday, the euro zone’s finance ministers are likely to throw a tantrum once again when they meet in Riga, as Greece has yet to come up with a list of acceptable economic reforms.

Greece Could Earn Hundreds of Millions of Euros From Turkish Stream – Putin

As a reminder, don’t count Greece out mainly due to the energy factor. They could very likely be a regional oil & gas hub for the European continent that’s too important to let go. Therefore, don’t be surprised if the Troika gives a few concessions towards the increasingly desperate and belligerent Greeks. Where the energy supplies actually come from, be it from Russia or another Mediterranean land such as Cyprus, is yet to be seen — although the latter would break Europe free from Russia.

 

MOSCOW (Sputnik) — The Turkish Stream gas pipeline could help Greece become one of the main power distribution centers in Europe, President of Russia Vladimir Putin said.

Europe plunged into energy crisis as Russia cuts off gas supply via Ukraine

Russia cut gas exports to Europe by 60 per cent today, plunging the continent into an energy crisis ‘within hours’ as a dispute with Ukraine escalated.

This morning, gas companies in Ukraine said that Russia had completely cut off their supply.

Russia Is About To Absorb Part of Another Country

Surely, if this escalates into another war, the propaganda masters behind the last Russian-Georgian war will effectively paint tiny Georgia as the aggressor. The previous, long-planned and pre-determined 2008 Russian invasion of Georgia, that is. The next invasion would likely permanently take away the energy corridor from the Caspian Sea to Europe planned under the Bush/Cheney administration to bring independence. This is also why you see Europe frantically scrambling to find alternatives to Russian resources.

If you haven’t figured it out yet, it was never about an aggressive rogue military in a nation barely larger than Israel. But that’s what the masses believe and it goes to show how effective the propaganda is. You can read more about Georgia under its respective category HERE.

While Moscow continues to be hammered by low oil prices and western-led sanctions, it is doubling down on hard-edged political and financial retribution: Russia is preparing to absorb a province of neighboring Georgia, and delivering an ultimatum to Europe that it could lose much of the Russian gas on which it relies.

Ten months after annexing Crimea and igniting his current standoff with the west, Russian president Vladimir Putin will as early as this week take control of South Ossetia, a breakaway region of Georgia, with which he has a long, sour relationship. He is to sign a little-publicized accord that will hand over foreign policy, border control, and security to Moscow.

How Ukraine Is Changing Global Energy Flows

On September 1, 2014, Russian President Vladimir Putin and Chinese Premier Zhang Gaoli initiated the construction of what they claim will be “the world’s largest construction project.” This 3,968 km “Power of Siberia” pipeline connecting gas fields between Russian’s Siberia and China’s Northeast region is expected deliver four trillion cubic meters of gas to China over the next thirty years. With an estimated 1.2 trillion cubic meters of gas and 93 million tons of liquid hydrocarbons stock, Chayanda fields in the Republic of Yakutia will be the chief production station conveying gas to Northeast China through the border city of Blagoveshchensk. The overall cost of this gigantic enterprise has been evaluated at more than 20 billion dollars, which covers other investments in the region totaling 7.5 billion dollars.

Russia and China strengthen oil and gas deals

Chinese and Russian oil companies signed several deals during the recent Asia Pacific Economic Cooperation annual meeting in Beijing, indicating that the two countries have entered a honeymoon period in the area of energy cooperation, Guangzhou’s 21st Century Business Herald reports.

China National Petroleum Corp (CNPC) signed framework deals with Russian oil company Rosneft and gas supplier Gazprom Nov. 9 for buying a stake in an oilfield in Russia and in gas supplies.

The deals came as Moscow saw a further drop in oil prices and in its currency, the rouble, since July, which has hurt the Russian economy, the newspaper noted.

Putin: Russia will reduce Europe’s gas supplies if Ukraine takes gas

Russia’s President Vladimir Putin said Russia will have to reduce gas supplies to Europe if Ukraine steals gas. Pipelines that supply Europe crosses Ukraine en route.

Turkish warship monitors Cyprus gas exploration

…and now we have factual proof as to why a German-led European Union had pushed Russia out of Cyprus and raided the cash vaults. It had nothing to do with corrupt Russian bankers, businessmen or shady politics. The hit was motivated by solidifying Europe’s future energy independence and positioning EU as a future world superpower. In previous posts, it was also mentioned that Greece would be the future corridor for forwarding energy from the Mediterranean, Middle East and northern African nations. Don’t count the ‘broke’ nation out of the game.

 

Turkey has sent a warship to the island of Cyprus to monitor a drillship that has been sent to search for natural gas reserves off the island’s coast.

Italian-Korean consortium ENI/KOGAS has sent the Bahamas flag-carrier Saipem 10000 drillship to the “Onasagoras” gas field in Block 9 of the island’s Exclusive Economic Zone (EEZ) on Tuesday.

In response, the Turkish navy has sent its Bafra Korveti warship to observe the drillship’s activities.

Greek Cypriot Foreign Minister Ioannis Kasoulides said on Wednesday that hydrocarbon exploration in the region will continue despite Turkey’s objections, calling Turkey’s actions ‘potential harassment’.