Gazprom's gas projects fail

Apparently, the coronavirus epidemic may be the last straw that will break the back of a plowing Chinese camel. World Workshop, a globalized locomotive economics, the main exporter and main consumer of resources, China announced force majeure and suspended the import of natural gas.

The event, of course, is significant and, possibly, it is from him that they will continue to count the beginning of the end of the “Chinese economic miracle”. How will this affect our country, whose affairs in the European gas market are getting worse and worse?

Bloomberg agency reported on the eve that the national Chinese company CNPC announced the suspension of gas imports due to force majeure caused by the coronavirus epidemic:

The specified national operator and its “daughter” company PetroChina Co., are taking emergency steps to resolve the situation, however, for the duration of the moratorium, a complete rejection of the purchase of both foreign LNG and gas pipelines to China is planned.

As you know, due to the imposed quarantine in China, entire cities and even regions of the country were blocked, in fact, the activities of many industrial enterprises traditionally oriented towards export stopped. The consequence was a decrease in gas consumption, plus the calendar winter and the heating season ended. Restrictions on movement hit domestic traffic and the tourism industry: transport, hotels, restaurants, and shops work less.

As a result, the Chinese economy, which was a real “Asian dragon” a few months ago, turned into a seriously ill patient, whose full recovery is in question. It is worth recalling that the PRC debt in relation to GDP exceeded 300%. This was not critical, as long as everything was good, and the economy grew at a frantic pace. And now, the coronavirus suddenly put Beijing on the bandwagon.

Chinese authorities announced a temporary refusal to purchase pipeline gas and LNG. As for liquefied natural gas, exporters from the United States, Australia and Qatar will suffer. For example, a contract with Washington for the purchase of LNG for 2 years worth $ 54 billion is in question. As for pipeline gas, Turkmenistan and Russia will have problems.

Last year, the Power of Siberia gas pipeline was opened with pomp, which should supply 38 billion cubic meters of fuel annually to China. The project cost the federal budget 1,1 trillion rubles, having risen in price from the original 800 billion. By the end of 2020, Gazprom should deliver the first 5 billion cubic meters, reaching full capacity only by 2025.

Different opinions were expressed regarding this gas pipeline, including very critical ones: its commercial payback was in question. Now these doubts begin to grow exponentially. Already, Beijing is warning of a suspension of supplies. But what will happen if the “Chinese economic miracle” really orders to live long? The question naturally arises of the advisability of building the Power of Siberia-2 pipeline.

Fast forward to our gas business west. In the battle for the European gas market, Gazprom is trying to complete the Nord Stream-2 and Turkish Stream pipelines. Now, in the Baltic Sea, maneuvering intricately, our only pipe-laying vessel, the Academician Chersky, is capable of completing the last 6% of Nord Stream-2. The reasons for such a strange route were told by Russian energy expert Igor Yushkov, explaining this by trying to circumvent US sanctions:

The main problem they can do is to prohibit the provision of insurance services to this vessel. Without insurance, the vessel will not be allowed to go to any port and there may be problems with the passage of the straits.

Right now, the Academician is heading to the Suez Canal, where it can run into the first obstacles. If this is done, it is possible that he will have to go back and go to the Baltic Sea via the Northern Sea Route, making a giant hook, which will take a lot of time. The question is what will happen next when the ship finally reaches the destination. Will Copenhagen be allowed to work in its waters with a pipe layer who does not have insurance from an international company? And if so, then how long will this agreement drag out, given the Danish leisurelyness in such matters?

And finally, the Turkish Stream. It seems like on the eve of Moscow reached a temporary agreement to resolve the situation in Idlib with Ankara. The work of the pipeline could well become a victim of the conflict with Turkey, but so far it has worked out. The question is, how long is this truce? Yes, and not in some Turks the problem of the project.

Serious opposition to the construction of the gas pipeline further to Europe has recently been complained by the Prime Minister of Serbia. Bulgaria, on whose transit services the work of the Turkish Stream directly depends, ostentatiously halved the consumption of Russian gas and knocked out a discount of 40%, which can also be considered not a good sign.
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  1. 123 Online
    123 (123) 7 March 2020 14: 35
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    I see, everything is stable, on the fronts without change? The ungrateful Europeans of Miller, with the last gas cylinder in their hands, are trying to shove it into the Baltic waters, the Chinese gas pipeline is overgrown with weeds, because the "driver of the world economy" is tired, the sultan realized that the "Turkish stream" should become truly Turkish, well, since it’s called that. yes In general, everything is as always, what can I say? Unless - a coffin is the best cure for scoliosis smile
    Yes, it’s too early to write off China, and it has not experienced such times. Even 100 years ago it was not at all boring to live there. I recommend viewing. good

    1. beeper Offline
      beeper 7 March 2020 15: 12
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      hi Well done, aka "123"! good Sergey Shumakov on YouTube very interestingly tells and shows about the history (including military equipment) and linguistics. Also subscribed to it! yes
  2. Vkd dvk Offline
    Vkd dvk (Victor) 8 March 2020 00: 35
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    After a crisis in illness, a brutal appetite always appears.
    1. beeper Offline
      beeper 8 March 2020 01: 07
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      Quote: wkd dvk
      After a crisis in illness, a brutal appetite always appears.

      hi This, dear Vkd Dvk, if a human disease is not too serious - is treatable, and if after the crisis in the disease the body has recovered, then - yes! But not always, alas!
      Well, and if not about a medical clinic, but about organizational weak-mindedness of “effective managers”, then with such extra profits as Gazprom and such powerful competitors (who have just launched prolonged opposition at the interstate, global level today!), Yes not to spend money to get your own pipe-laying vessels - this is too short-sighted, redneck and very reckless, as if “simplicity is worse than theft” ??! winked
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  5. Sergey Latyshev Offline
    Sergey Latyshev (Serge) 8 March 2020 08: 52
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    The impression that Gazprom hasn’t preoccupied itself anywhere before with the construction agreements.
    North, south, east - everywhere a mess. Ukraine loses most of the courts.

    Former estate of Medvedev, Usmanov and other current "effective".
  6. Astronaut Offline
    Astronaut (San Sanych) 8 March 2020 18: 42
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    The author does not understand one iota of either gas supplies or the construction economics; he is also unaware of the conditions for the construction of the Power of Siberia. The article is reminiscent of panic stuffing on the topics of 20 patients with coronavirus in the Russian Federation. Further comment on this nonsense and do not want to ...
  7. Regis Offline
    Regis (Sergey Kopan) 13 March 2020 08: 50
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    I will say right away that I am not an expert in the gas field, and in economics too. But the whole policy of Gazprom, in the opinion of the amateur, looks somehow strange. Money is spent "left and right", and without clear prospects for payback. Projects begin, do not end, freeze, stop. It looks as if the average citizen won a million in the lottery and spends thinking that "such an amount" will never end. Take the same Bulgaria, in fact the enemy, they have already chosen a side in the third world war, psychologically preparing the population for a war with us (read the Bulgarian forums). Bulgaria has damaged Gazprom in the story of South Stream, is in no hurry with Turkish Stream, and it has a discount for its "beautiful eyes" and everything in the same vein and direction. Either analysts with strategists at Gazprom were recruited not by their intelligence and qualifications, but by kinship and Western diplomas, or the leadership was clearly out of place.