Wednesday, July 1, 2020

Former chancellor Schröder lobbies for Nord Stream 2 in German parliament

Ex chancellor Gerhard Schröder was invited to the economic committee of the Bundestag by the leftwing and ex-communist party of the GDR, Die Linke, to speak as an expert on Nord Stream 2 where he spoke against US sanctions against the pipeline and appeals to counter-sanctions:

Schröder is Chairman of the Board of Directors at Nord Stream 2. In the Economic Committee, he now rejected the accusation that Nord Stream 2 jeopardizes Germany's security of supply. The opposite is the case.
The SPD politician also had an answer to the impending US sanctions. Schröder spoke in favor of EU counter-sanctions. The federal government had to put pressure on it at EU level.

You can read the rest of the piece via the below link:



Friday, June 12, 2020

German officials fear US sanctions against german agencies

As the US Congress, in a rare bipartisan cooperation, votes new sanctions against any company supporting the completion of controversion pipeline Nord Stream 2, german officials fear that those sanctions could also hit german agencies and authorities who perform inspections or certifications, writes german newspaper "FAZ":

"The document points to a bipartisan bill that democratic and republican senators introduced in Washington in early June in the American legislative process. According to the Ministry of Economic Affairs, "all companies" that "offer services, insurance or certain retrofit services for laying ships" in connection with the planned Nord Stream 2 gas pipeline should "be included" in the planned sanctions. It also says: "The same applies to services such as tests, inspections or certifications that are required for the operation of Nord Stream 2."
The Department of Commerce is now afraid that the proposed American law could also "result in administrative action by state authorities in connection with the completion or operation of the pipeline being relevant to sanctions". The paper says: "It would be a novelty if sanctions were also directed against the authorities of (friendly) governments or even against the governments themselves." In any case, "it can be assumed that the new sanctions proposals will significantly increase the number of German and European companies a potential sanction target ”. American punitive measures against other countries have repeatedly been directed against representatives of companies and authorities. Accounts were blocked or entry bans issued."

Monday, June 1, 2020

Wilhemshaven FSRU is taking shape

MarineLog writes:

"Mitsui O.S.K. Lines Ltd. (MOL) and LNG Terminal Wilhelmshaven (LTW) have signed an agreement to build and charter a 263,000 cu.m LNG Floating Storage and Regasification Unit (FSRU) for the planned LNG terminal in Wilhelmshaven, which is Germany’s only deep water port and can be reached without any tidal constraints.

The FSRU will be built by South Korean’s Daewoo Shipbuilding and Marine Engineering (DSME) then chartered by LTW (which is a subsidiary of Düsseldorf headquartered Uniper SE) for 20 years.

DSME said in a filing last week that it had signed a contract worth $340 million to build an FSRU for an undisclosed customer.

The FSRU will make it possible to offload, store and regasify LNG for the German market. It will be moored off the coast not far from Wilhelmshaven and will handle incoming LNG tankers there. The regasified gas will then be pumped from the FSRU along a short connecting pipeline under the sea to the port facilities and finally fed into the German gas transmission network. This eliminates the need to construct complex regasification facilities on land."


 You can read the rest of the piece via the below link:

 

New US sanctions to be introdueced against Nord Stream 2

New York Times:

"Cruz told the Atlantic Council think tank this month that new sanctions would apply to any ship or any owner who attempts to finish the project. Ship officers would lose their ability to come to the United States and all their assets would be blocked, he said."

   

Thursday, May 28, 2020

LNG market under pressure

The LNG market suffers from a Covid-19 induced oversupply and low prices:

   

"As a result of reduced industrial and commercial activity, LNG buyers have been scaling down orders and in cases refusing cargoes invoking force majeure. Buyers in Asia and Europe have cancelled about 20 US LNG cargoes for June loading. Prices are now at a level that threatens the economics of not just new projects, but also existing gas production, with some liquefaction plants having to shut-in production – especially in the US.

Prices are now so low, around $2/mmbtu, that US LNG exporters are trading at less than half breakeven levels, weakening their position. With oil prices staying low, oil-indexed LNG prices will also stay low. And with new, and already sanctioned, liquefaction projects continuing to come into the market until 2027, the pressure on prices is expected to continue.

Demand for LNG may remain more or less flat, but it is very difficult to forecast. The International Energy Agency (IEA) estimates that there will be a 5 per cent drop in gas demand in 2020. The biggest problem, though, is increasing LNG production and oversupply – it may take years before this problem fully dissipates.


(...)

But some projects, especially those that are low-cost, are still progressing. Qatar LNG has reconfirmed its plans to expand its liquefaction capacity by 30mtpa by 2025, with another 19mtpa to be added by 2027. This is the world’s cheapest source of LNG.

New LNG export projects, and developers, need to brace themselves for a continued glut as further production is added, outpacing global demand, contributing to prolongation of depressed prices."


You can read the rest of the piece via the below link:

 

Ukraine ready for US LNG



"Ukraine’s government on Wednesday approved a memorandum on the prospect of importing at least 5.5 billion cubic metres (bcm) of liquefied natural gas (LNG) a year from the United States, according to a televised meeting.

Acting energy minister Olga Buslavets said the memorandum envisages Louisiana Natural Gas Exports Inc as the seller.

Ukraine has pushed to diversify its energy supplies after relations with its traditional supplier, Russia, collapsed following Moscow’s annexation of Crimea in 2014."

Wednesday, May 27, 2020

How China distorts the stainless steel market

A very interesting article by Elisabeth Braw in Foreign Policy:

"The Indonesian plant, owned and operated by the Chinese stainless-steel firm Tsingshan, opened in 2017. The choice of location was no coincidence: Indonesia has the world’s largest reserves of nickel, a key component of stainless steel. More than two-thirds of the world’s nickel is used to make stainless steel. (Regular steel consists almost exclusively of iron, while stainless steel also contains nickel and chromium.) And the plant’s construction was supported by the Chinese government; indeed, it falls within China’s global Belt and Road Initiative.
Then, when the plant had operated for less than two years, the Indonesian government suddenly announced that it would ban exports of nickel starting in January of this year. Predictably, the move caused global nickel prices to skyrocket. But thanks to its Indonesian plant, Tsingshan is shielded from the nickel hike.
 
In the past two decades China has conquered the stainless-steel market. Though stainless steel may seem unsexy, it’s vital to virtually every other sector, and production is growing faster than that of other metals such as lead, copper, and aluminum. Weaponry, pipelines, ships, and washing machines all contain stainless steel.
 And in the past couple of decades, the production of steel—the main component of the stainless kind—has shifted dramatically.
In 2004, the world’s top 10 steel producers included only one Chinese company, Shanghai Baosteel; the other top firms were American, European, Indian, and South Korean. Back then, just 25.8 percent of the world’s steel was made in China. In 2018 (the latest year with data available), six of the world’s largest steel companies were Chinese, some of them government-owned, and China accounted for 51.3 percent of global steel production—a figure that doesn’t capture production by Chinese companies in other countries).
On the global top 10 list, South Korea, a former steel giant, is represented only by Posco. In stainless steel, the development is even more stark: in 2005, China produced 12.9 percent of the world’s stainless steel, while Europe produced 34.8 percent and the United States 9.2 percent. By 2018, China had more than quadrupled its share to 52.6 of the world’s stainless steel, while Europe’s share had shrunk to 15.6 percent and the United States had just a 5.5 percent share."

You can read the rest of the piece via the below link:

 

After expiration of transit deal: Russian gas transit via Poland drys up

Reuters:

"Russian natural gas transit via the Yamal-Europe pipeline, which traverses Poland, has almost dried up, Interfax cited gas pipeline operators as saying on Monday, days after a gas transit deal between Moscow and Warsaw expired.

Russian gas giant Gazprom declined immediate comment.

The gas transit deal between Russia and Poland, dating back to the 1990s, expired on May 17 as Warsaw aligns its energy regulations with European Union rules and curbs its decades-old dependence on Russian fuel."


You can read the rest of the piece via the below link:

Russian governement tries to steady battered oil industry

Oilprice.com writes:

"Russia’s President Vladimir Putin has tasked the government with implementing a set of measures aimed at supporting the oil industry for the duration of the OPEC+ production cut agreement.

According to a document published on the website of the Russian presidency, the measures include a prescription not to sanction companies that stray outside their production quotas and a temporary lifting of penalties for state oil companies for not sticking to their 2020/2021 investment programs.

The document also lists “special rates” to be implemented by pipeline operator Transneft and Russian Railways for transporting crude oil and oil products for the duration of the OPEC+ deal."


You can read the rest of the piece via the below link:

    

Germany: outgoing US-Ambassador Grenell announces new sanctions against Nord Stream 2

US-ambassador to Germany Richard Grenell who unexpectedly terminated his appointment last week announces new sanctions against the Nord Stream 2- pipeline and warns Germany to reconsider its relationship to Russia, writes Handeslblatt:

"In the usual undiplomatic tone, Grenell calls on the federal government to fundamentally rethink its policy on Russia. "Germany has to stop feeding the beast while not paying enough for NATO," he told the Handelsblatt. Grenell had already left Berlin on Sunday. He will probably never come back to Germany.
The Americans have long been bothered by German imports of Russian gas. Above all, they fought the Nord Stream 2 Baltic Sea pipeline with a determination that had long been underestimated in the federal government. At the end of last year, the USA managed to force a construction freeze. Your means: threats of sanctions against western specialist companies who lay the pipes on the bottom of the Baltic Sea with their ships. Since then, the Russians have been trying to complete the rest of the pipeline themselves. To do this, they moved two ships to German coastal waters."

You can read the rest of the piece via the below link:

Tuesday, May 26, 2020

Qatar maintains enhancement of natural gas North Field

Financial Times reports:

"The project will increase Qatar’s production capacity from 77m tonnes of LNG per annum to 110m by 2025, which could rise to 126m tonnes two years later. The move should help the small Gulf state regain the title of the world’s top LNG producer from Australia at a time when other projects have been thrown into doubt by the pandemic."

You can read the rest of the piece via the below link:

Poland receives LNG from Qatar

"Poland’s sole liquefied natural gas facility in Swinoujscie has received another shipment of LNG as the country is looking to further boost imports of the fuel.
The arrival of Nakilat’s 217,000-cbm Q-Flex LNG carrier Al Gattara on Thursday marks the 95th delivery to the Swinoujscie facility on the Baltic Sea.
The delivery is part of a long-term deal between Poland’s dominant gas firm PGNiG and LNG producing giant Qatargas. 
 PGNiG is in charge for all the supplies coming to the import terminal operated by Gaz-System’s unit Polskie LNG.
Poland has significantly increased LNG purchases via its terminal in Swinoujscie following PGNiG deals with Qatargas and US player Cheniere.
The move is a part of reducing the country’s decades-old reliance on Russian pipeline gas but also cutting dependence on coal."

Writes Offshore-Energy. You can read the rest of the piece via the below link:


 

Sunday, May 24, 2020

Nord Stream 2: is the BNetzA about to jink to save the pipeline?

One should not interpret recent media reports to the effect that the Nord Stream 2 project is in peril, writes Alan Riley. The German energy regulator the Bundesnetzagentur (BNetzA) it is reported may not grant Nord Stream 2 a derogation from EU energy liberalisation regime, contained in the gas directive 2009. Such a failure to obtain a derogation from the BNetzA, even if that is its final decision, is likely to prove far from fatal to Nord Stream 2.


"It is therefore possible that the entire focus on the derogation procedure over the last few months, and the media reports that the BNetzA does intend to adopt to grant a derogation to the pipeline is all part of a bait and switch operation. Emphasise over several months the prospect of a derogation being granted, at the last moment, pull the prospect of a derogation and instead take a decision that looks like compliance with EU law. In reality the new decision does not comply with Union law either but it is not a derogation decision. As a consequence although it also seeks to subvert Union law, it will not immediately bring down the full weight of the EU infringement procedure upon the BNetzA and the government in Berlin.

There are a number of options for Nord Stream 2 for something that looks like a measure that complies with EU law, but is really nothing of the sort. For example, last year before the discussion surrounding the derogation procedure took hold there was a discussion amongst advocates of the Nord Stream 2 pipeline that one option would be to focus application of EU law solely to the ‘stub’ of the pipeline. The stub is the 55km of pipeline solely in German territorial waters. The stub argument is essentially that EU law only applies to the pipeline in EU territory, the rest of the pipeline remains free of Union law and can be owned and controlled by Gazprom.

The stub would be fully compliant with EU energy liberalisation law and in particular the EU’s gas directive. There would even be no need for an exemption as that part of the pipeline will be subject to ownership unbundling. The pipeline would be owned by a EU owner unconnected with Nord Stream 2 and Gazprom. It would comply with third party access rules. However, no one but Gazprom would be able to access the stub from international waters and it would set a transparent tariff regime but conscious it would have only one source of supply from Gazprom.

Such a ‘stub’ project would be a legal sham. There is only one single pipeline running from Russian Federation territory to German territory. It was designed, planned and route permits were obtained on the basis of it being one pipeline. The majority of the pipeline outside German and EU territorial waters has no purpose or value save in relation to the physical connection with that part of its pipeline within EU territory. One can legitimately apply the territoriality principle in allocating jurisdiction in public international law as a consequence of the pipeline’s fixed connection to infrastructure in EU territory permitting the full application of Union law to the pipeline.

However, from a PR perspective opting for the stub approach has the merit of being more easily able to defend in the media. It is much easier for the German authorities to present the application of EU law to the stub as reasonable application of Union law, than participate in what would amount to an overt breach of Union law, by granting an unwarranted derogation to Nord Stream 2.

Applying EU law to the stub would create a legal framework to the pipeline which can then be defended over the next few years through the EU’s judicial hierarchy. In parallel, the pipeline can be completed and can be functioning. The facts on the ground will have been put in place with the aim of then minimising any subsequent application of Union law to an already functioning pipeline."


You can read the rest of the very interesting piece via the below link:


 

 

Chinas's manoevering between iranian oil imports ans US sanctions

China has to tack between the need for crude and impeding US sanctions, The Diplomat:

"Chinese tankers are reported to have turned off their transponders, automatic identification systems, prompting warnings from U.S. officials. And reports surfaced not long after the sanctions waivers terminated that Iranian tankers were supplying China, sometimes also switching off their transponders. They are believed to engage in the practice while allegedly conducting ship-to-ship  (STS) transfers to China-bound vessels off the Malaysian coastBloomberg research revealed that STS deliveries had risen sharply in September, three times more than the previous month. Although the provenance of the oil was said to be unclear, the agency quoted an analyst suggesting it could be Iran or Venezuela.  
The scale of Beijing’s alleged clandestine supplies has yet to be determined, but given the reported marked increase in volume of disguised cargoes last year it might be receiving more than its declared imports. The U.S. has sought to deter China’s suspected sanctions evasion by targeting non-compliant companies and their officials. There have been a flurry of penalties since the American waivers ended. In September, two oil tanker subsidiaries of COSCO, a major Chinese shipping and logistics company, were blacklisted, and the action reportedly sent world freight costs to record highs and disrupted the global shipping market.  
The sanctioning of the shippers threatened to complicate U.S.-China trade negotiations. A “Phase One” deal was eventually achieved in January, and on the eve of the agreement it was reported that US officials were working behind the scenes with independent Chinese refiners to prevent purchases of Iranian crude. Just days after the breakthrough in the trade talks, Washington lifted sanctions against one of the COSCO subsidiaries. 
The aim of the move appears to have been twofold: easing the impact of the original black-listings; and retaining leverage over China’s oil trade with Iran. A senior Chinese official reportedly complained about the sanctioning of the COSCO units in the trade talks which, coupled with the steep drop in official Chinese imports of Iranian crude, suggests American penalties have real deterrence value, even if some degree of sanctions evasion continues."

You can read the rest of the piece via the below link:

https://thediplomat.com/2020/05/us-sanctions-prompt-china-to-cut-most-iran-oil-supplies-officially-at-least/ 
 

Friday, May 22, 2020

EGC dismisses Nord Stream 2 actions against EU-gas-directive

The General Court of the European Union declares that the actions brought by Nord Stream AG and Nord Stream 2 AG against Directive 2019/692, which extends certain rules of the internal market in natural gas to pipelines from third countries, are inadmissible.

Those companys objected to provisions of the EU-gas-directive "that those operators have, inter alia, an obligation to unbundle transmission systems and transmission system operators and to introduce a system of non-discriminatory third-party access to gas transmission and distribution systems on the basis of published tariffs." 

"The General Court finds that they are not directly concerned by the amending directive. 
Indeed, it is only through the intermediary of the national measures transposing that directive that the Member States will adopt or have adopted that operators such as those who have brought the actions in question will be or are subject (under the conditions agreed on by those Member States) to obligations under Directive 2009/73, as amended. 
Regarding the national transposing measures which are intended, as from 24 February 2020, to make the obligations under Directive 2009/73, as amended, binding with regard to operators, the Member States have a margin of discretion. 
Moreover, according to the amending directive, the national regulatory authorities may, under certain conditions, decide to grant exemptions or derogations from certain provisions of Directive 2009/73, as amended, to major new gas infrastructure, on the one hand, and to gas transmission lines between the Member States and third countries completed before 23 May 2019, on the other. For the purposes of implementing those provisions, the national regulatory authorities have a wide discretion as regards the grant of such exemptions or derogations and any specific conditions to which those exemptions or derogations may be subject. 
Regarding Nord Stream AG, the General Court finds, in addition, that it is also not individually concerned by the amending directive. 
In that regard, the General Court notes, inter alia, that Nord Stream AG did not have a right to operate and/or continue to operate the Nord Stream dual pipeline system free from any regulatory constraints of the EU, at the very least as regards the part of that gas transmission line located in the territory of the EU, in this instance in the territorial sea of a Member State. 
Thus, the fact that, when the amending directive was adopted, Nord Stream AG was part of a limited, identified or identifiable, circle of operators concerned by the extension of the territorial and/or material scope of Directive 2009/73 does not permit a finding that it is individually concerned by the amending directive. Indeed, it is common ground that the amending directive is applied by virtue of objective criteria defined by the EU legislature, including the criterion requiring gas transmission lines in respect of which certain derogations have been requested to have been completed before 23 May 2019, the date on which the amending directive entered into force."

You can find the press release of the EGS via the below link:

https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-05/cp200062en.pdf 

Nord Stream 2: the consequences of the BNetzA decision

What does the decision of the German Federal Network Agency (Bundesnetzagentur, abbr.: BNetzA) mean for Nord Stream 2? PISM outlines some answers:

"The decision has no impact on NS2’s construction but the application of the Gas Directive in its fullest extent poses a serious challenge to Gazprom’s management of the pipeline. Instead, an independent operator will be required to manage it and access to the NS2 for exporters other than Gazprom should be granted as well, otherwise, the European Commission might ask the Court of Justice of the EU (CJEU) to limit Gazprom’s access to NS2’s total capacity. According to Russian law, Gazprom has a monopoly on gas exports via pipeline. The company is concerned that its competitors might take advantage of this situation and lobby for changes in the Russian legislation."

You can read the rest of the piece via the below link:

https://pism.pl/publications/German_Regulator_Denies_Derogation_for_Nord_Stream_2 

Los Angeles: plasma torches for hydrogen production

A Los Angeles based company plans the production of hydrogen using waste paper:

"An energy company with big ambitions to produce the clean fuel of the future announced a deal Tuesday with Lancaster officials to make hydrogen by using plasma heating technology — originally developed for NASA — to disintegrate the city’s paper recyclables at temperatures as high as 7,000 degrees Fahrenheit.
Solena Group’s process has no commercial track record, and the company has not yet secured financing to build its $55-million facility in Lancaster, in northern Los Angeles County. Solena is one of many firms looking for ways to cheaply produce hydrogen without generating planet-warming gases in hopes that the clean-burning fuel will one day replace oil and gas for transportation or heating."

You can read the rest of the piece via the below link:

https://www.latimes.com/environment/story/2020-05-19/renewable-hydrogen-plasma-torches-for-southern-california 

GIPL: will LNG flow to Lithuania from Poland?

Biznesalert writes:

"Lithuanian Minister of Energy Žygimantas Vaičiūnas suggested that LNG could reach Belarus and his country through Poland. He revealed that an analysis of the use of the Poland-Lithuania Gas Pipeline for this purpose is underway, and it will end in August this year.
– It should be emphasized that we have good cooperation in the entire energy sector between Poland and Lithuania. We have good cooperation in the construction of the Poland-Lithuania Gas Pipeline, we also have cooperation between PGNiG and Klaipedos Nafta at the transhipment station since April – the minister calculated."

You can read the rest of the piece via the below link:

https://biznesalert.com/ministry-climate-electromobility-financing/ 

Gazprom’s gas exports revenues down in Q1

According to hellenicshippingnews.com : 

Natural gas exporting revenues of Russian gas giant Gazprom fell by 51.6% in the first quarter to $6.8 billion, the RIA news agency reported on Tuesday, citing customs data.
It also said that Gazprom’s average gas exporting price declined by 9% to $125 per 1,000 cubic metres in March from February.

Source:
https://www.hellenicshippingnews.com/gazproms-gas-exports-revenues-down-52-in-q1-ria/ 

Tuesday, May 19, 2020

China buys up cheap oil in large amount

Oilprice.com reports:

"While the rest of the world is tentatively coming out of lockdowns, China is taking advantage of the cheapest crude oil in years to stock up as demand is starting to return in the world’s largest oil importer, Bloomberg reported on Friday, citing tanker-tracking data it has compiled. At present, a total of 117 very large crude carriers (VLCCs) – each capable of shipping 2 million barrels of oil – are traveling to China for unloading at its ports between the middle of May and the middle of August. If those supertankers transport standard-size crude oil cargoes, it could mean that China expects at least 230 million barrels of oil over the next three months, according to Bloomberg. The fleet en route to China could be the largest number of supertankers traveling to the world’s top oil importer at one time, ever, Bloomberg News’ Firat Kayakiran says.
Many of the crude oil cargoes are likely to have been bought in April, when prices were lower than the current price and when WTI Crude futures even dipped into negative territory for a day."

You can read the rest of the piece via the below link:

https://oilprice.com/Energy/Energy-General/A-Huge-Fleet-Of-117-Tankers-Is-Bringing-Super-Cheap-Crude-To-China.html 

The consequences of saturated oil storage on US production

Goehring & Rozencwajg give a gloomy forecast on US oil production:

"According to the EIA weekly inventory figures, US production has fallen by nearly 1 mm b/d or 7% in only five weeks – the second-sharpest decline in US production ever outside of hurricane-related activity.

Most of these “involuntary” cuts will never come back online. In some cases, shutting in a well for a prolonged period will irreparably damage the wellbore or reservoir. The stripper wells meanwhile were only marginally economic to begin with on an operating basis and would never justify the capital cost to drill through the cement plugs used to cap them. While offshore production is accustomed to shutting in production for short periods during hurricanes, longer-term curtailment requires the well to be permanently sealed making re-entry nearly impossible."

You can read the rest of the piece via the below link:

http://blog.gorozen.com/blog/oil-production-cuts-and-their-long-lasting-repercussions 

Nord Stream 2: Gazprom's options after denial of exemptions by BNetzA

An interesting analysis of the options left to Gazprom after it is clear that the Nord Stream 2 pipeline will have to comply with the EU-gas-directive:

"Germany’s regulatory office Bundesnetzagentur announced it decided not to award derogation to Nord Stream 2, a gas pipeline connecting Germany and Russia, from the amended EU Gas Directive. According to the law, gas pipelines from outside of the EU that were not completed before 23 May 2019 need to have an independent operator, independently set tariffs and provide access to third parties. Gazprom, which owns the operator of the NS2 project, tried to argue that investment decisions about the pipeline had been made before 23 May last year, which meant the project had been somehow completed from the point of view of financing. Germany decided the gas pipeline had not been finished, which, by the way, was in line with common sense because a gas pipeline that does not connect point A to B cannot transmit gas, and Nord Stream’s Danish section is still under construction and is waiting for a permit from the Danish Energy Agency. The wait may be long, as the Agency had already delayed the project in the past when it took its time to make a previous decision. However, Russia may question the BnetzA ruling in court, similarly to what Poland’s PGNiG wanted to do if the decision had been in favor of Nord Stream 2. The court case may take place while the gas pipeline is allowed to operate, or not. This remains to be seen.
BnetzA’s decision means Nord Stream 2 AG will have to implement EU regulations with regard to the disputed pipeline. This is a hard nut to crack for Gazprom and a conflict between Russian and EU law. Russia granted Gazprom legal exclusivity over gas exports via gas pipelines, including Nord Stream 2, so it does not offer access to its pipelines to third parties. Additionally, Gazprom owns NS2 AG and is the pipe’s only gas provider, which means it would be responsible for setting tariffs. This goes against ownership unbundling required by the EU law.
Now Gazprom may either sell the pipeline, or hand over its operation to an “independent” company, that would guarantee fair transmission tariffs. Since Nord Stream 2 AG has a full share ownership it is not allowed to be the operator, but it remains to be seen whether this role could be played by a daughter company of the giant from Petersburg, which would hold a minority share. Perhaps the Russian-German company Gascade could become the pipe’s operator. Gascade is a joint venture of Gazprom and BASF that operates gas pipelines in east Germany, including OPAL, which is an onshore extension of Nord Stream, and EUGAL (in construction), an onshore leg of Nord Stream 2."

You can read the rest of the piece via the below link:

https://biznesalert.com/russia-eu-law-nord-stream-2-derogation-gas-directive/ 

Monday, May 18, 2020

Yamal pipeline: end of transit contract gives Poland leverage

Wojciech Jakobik writes in Biznesalert.pl:

"The political contract that defined the terms and conditions of gas transit via the Polish section of the Yamal gas pipeline will end on 16 May 2020. From then on the pipeline will enter its new normal, as the old contract rules will be replaced with EU regulations that ensure access to the pipe’s capacity in Poland on the basis of auctions."

You can read the rest of the piece via the below link:

https://biznesalert.com/poland-russia-yamal-gas-pipeline-gazprom/ 

Saturday, May 16, 2020

German Federal Network Agency: no derogation from gas directive for Nord Stream 2

https://www.bundesnetzagentur.de/EN/Service-Funktionen/RulingChambers/Chamber7/BK7-20-0004EN/BK7-20-0004EN.html?nn=269738The Federal Network Agency of Germany (Bundesnetzagentur) has decided in a decree yet to be published that it won't grant any derogation from the EU-Gas-directive to the controversial Nord Stream 2 pipeline:


"The Bundesnetzagentur has today rejected the application of Nord Stream 2 AG for derogation from regulation for the section of the Nord Stream 2 pipeline located in German territory.

Pipeline not completed

The section of a gas interconnector involving a third country located in German territory can be granted a derogation from regulatory requirements upon application and under certain conditions. For this, it is necessary that the gas interconnector was completed before 23 May 2019.
Since the Nord Stream 2 pipeline had not been fully laid by 23 May 2019, the Bundesnetzagentur has rejected the application for derogation made by Nord Stream 2 AG. When it is put into operation, therefore, Nord Stream 2 will be subject to German regulatory requirements and European rules on unbundling, network access and cost regulation.
The responsible ruling chamber of the Bundesnetzagentur understands the term "completion" in a constructional/technical sense. The applicant, by contrast, believes it to mean completion in an economically functional sense and refers to the investment decision, which was made well before 23 May 2019.
Nord Stream 2 AG can appeal and have today's decision examined before a court.

Responses to the proceedings

All European Union Member States had the opportunity to examine Nord Stream 2 AG's application, with its annexes, and to submit a response. Responses to the consultation were taken into account in the decision, as was the joint statement submitted by PGNiG S.A. and PGNiG Supply & Trading GmbH, which were summoned to the proceedings upon application in a decision of 18 March 2020.
Neither any of the Member States nor the parties summoned shared the viewpoint of Nord Stream 2 AG as regards the term "completion".

Background

Since the amendment of the Gas Directive 2009/73/EC, the European regulatory provisions have also applied to interconnectors between a Member State and a third country. The new European provisions were transposed in the German Energy Industry Act (EnWG), which entered into force on 12 December 2019.
Subject to the conditions of the amended section 28b EnWG, the section of a gas interconnector with third country involvement located in German territory is to be granted a derogation from regulatory requirements provided it was completed by the relevant date and the other conditions under subsection 1 of the provision have been met.
A version of the decision from which confidential information has been removed will be published shortly at www.bundesnetzagentur.de/BK7-20-004 under the file number BK7-20-004.."

More information to come on the site of the Bundesnetzagentur.

https://www.bundesnetzagentur.de/SharedDocs/Pressemitteilungen/EN/2020/20200515_NordStream2.html;jsessionid=D3E9ED2D32B0B4F2C4D2206AFCD3B401?nn=265794

Friday, May 15, 2020

Germany: physicist praises new Dual-fluid reactor

German physicist Dr. Götz Ruprecht advertises a new type of nuclear Dual-fluid-reactor. He claims the reactor to be inherently safe and more efficient than any other reactor design:

"Ruprecht: The recycling of fuel rods is complex and expensive. The rapid-gap reactors used today are therefore not an option.
WELT: Then why the DFR?
Ruprecht: Because it is a fast reactor but has no fuel rods. Two liquids flow through its core, one carries the fuel, the other is the coolant. This technology, on which we hold a patent, enables the use of the entire uranium. And once the reactor runs, it becomes an omnivore: it can convert natural uranium, thorium, but also nuclear waste. Then we would not need a repository."

You can read the rest of the piece via the below link:

https://www.welt.de/wissenschaft/plus207983265/Dual-Fluid-Reaktor-So-laesst-sich-Atommuell-vernichten.html?ticket=ST-A-319819-KKl0omsNSfLjQs4tmBdH-sso-signin-server

Germany rejects exemptions from EU-gas-directive for Nord Stream 2

TASS: Nord Stream 2will not be exempted from EU-gas-directive and will need to comply with EU regulations that might delay the project and undermine its feasibility.

https://tass.ru/ekonomika/8479385

Thursday, May 14, 2020

BalticPipe has complete set of building permits

SPGlobal-Podcast: The planned project to build the BalticPipe, a 10 bcm pipeline, which will connect the Norwegian, Danish and Polish gas networks, now has a complete set of building permits. With it, Poland will end decades of dependence on Russian pipeline gas.


Q1 earnings provide snapshot of pandemic's impact on oil sector, hint at what's to come: It's been a chaotic couple of months for the global commodities markets, and the oil sector has been on the firing line of the price and demand collapse resulting from the coronavirus pandemic.

Wednesday, May 13, 2020

US Republicans: proposal to end dependency on Rare Earths from Chian

Bloomberg writes:

Senator Ted Cruz said he plans to introduce legislation on Tuesday that aims to end U.S. reliance on China for rare earth elements used in the manufacturing of products including consumer electronics, electric vehicles and fighter planes. The bill is part of a push in Congress to shift supply chains, particularly in industries critical for national defense, away from China and back toward the U.S.
(...)
"China provided 71% of the global rare earth elements produced in 2018 and was the top supplier to the U.S. that year, according to the Congressional Research Service. Some members of Congress have been pushing for years for the U.S. to reduce its reliance on China for the elements, particularly after trade restrictions in 2010 that sent prices spiking around the world.
The U.S. was once a major producer of rare earth elements -- which are relatively abundant but difficult to extract -- until China became a major low-cost producer in the mid-1980s, according to the CRS. Cruz and others in Congress have argued that Chinese state subsidies allowed that industry to flourish, killing off American competition."

You can read the rest of the peace via the below link:

https://www.bloomberg.com/news/articles/2020-05-12/cruz-seeks-to-end-u-s-dependence-on-china-for-rare-earth-metals 
 
 

Poland: parliament implements EU-gas-directive; thwart Nord Stream 2

Biznesalert writes:

"On May 13, 2020, the Act amending the Act – Energy Law and the act on the promotion of electricity from high-efficiency cogeneration, adopted unanimously in the Sejm and Senate, comes into force. It introduces the provisions of the revised gas directive into Polish law. The amended Act aims to implement into the Polish legal order the provisions of the amended Gas Directive, adopted after two years of efforts by the coalition of member states built by the Polish Government. Climate Minister Michał Kurtyka argues that the adopted changes allow the use of gas pipelines from third countries (e.g. disputed Nord Stream 2) the most important pillars of EU law.- This means the end of preferential treatment of gas infrastructure from third countries and its functioning in legal vacuum – said Michał Kurtyka in the Ministry’s announcement."

You can read the rest of the piece via the below link:

https://biznesalert.com/poland-gas-directive-nord-stream-2-energy-pern-oil/

EastMed pipeline on the starting block

Greek newspaper Ekathimerini writes:

"A deal for an undersea pipeline to carry gas from new offshore deposits in the southeastern Mediterranean to continental Europe signed by Greece, Cyprus and Israel earlier in the year was ratified by a wide majority in a parliamentary committee on Monday evening.
Signed in Athens by the leaders of Greece, Cyprus, and Israel in January 2020, the EastMed pipeline accord passed the first stage ahead of ratification with the votes of ruling New Democracy, main opposition SYRIZA and Movement for Change (KINAL)."

You can read the rest of the piece via the below link:

https://www.ekathimerini.com/252574/article/ekathimerini/news/eastmed-pipeline-deal-sails-through-parliamentary-committee

Wednesday, May 6, 2020

Geopolitical challenges of Covid-19 and oil price plunge

Interesting insights and analyses by Meghan O'Sullivan for Bloomberg:

"As history has shown, a big change in energy markets often precipitates a big change in geopolitics. For instance, the shift from coal to oil catapulted Middle Eastern countries to strategic significance. And the recent technology-driven boom in shale oil elevated the United States to net oil exporter status, changing its outlook on the importance of oil in global affairs. We now face a disruption of such proportions that it, too, will reorder some power relationships.
Right now, the focus in Washington is on how to save the U.S. oil industry, much of which is under enormous pressure given the drop in prices. While this is understandable and necessary, Washington needs to make room on its list of priorities for a number of strategic shifts that the crisis has created. For starters, policy makers should consider four challenges and opportunities that are already manifest."

You can read the rest of the piece via the below link:

https://www.bloomberg.com/opinion/articles/2020-04-29/covid-19-oil-collapse-is-geopolitical-reset-in-disguise


Thursday, April 30, 2020

Syria receives Iranian oil in large amounts

Radio Farda reports that tankers delivers oil in large quantities to Syria:

"Tanker tracking sources say Iran’s oil exports to Syria have increased substantially in recent weeks and currently several cargoes have reached the Baniyas port in Syria.
Tanker Trackers reported on Tuesday April 28 that several Iranian vessels are near port in Syria and the Middle East Economic Survey (MEES) reports that these tankers are carrying 6.8 million barrels of oil.
Since full U.S. sanctions were imposed on Iran in May 2019, Syria has been receiving an average of around 2 million barrels of crude monthly from Iran, and now more than three times is being delivered at once.
In January and February, Iran’s biggest oil customer, China reduced its imports and with this large cargo arriving in Syria, that country has become the largest oil importer from Iran.
There can be several reasons why this is happening. Excess oil stocks in the midst of sanctions and a global oil glut is forcing Iran to ship and perhaps store the oil in a friendly country. Another reason is that Bashar Assad’s government and Hezbollah can be conduits to sell the oil on the black market. One place Hezbollah can manage to do this is Lebanon, where it has sway over the government."

Monday, April 27, 2020

Saudi Arabia's crownprince's miscalculations

An interesting article by David Hearst about MBS's bad decisions and misperceptions that may lead to an economic downturn of the kindom:

"Both pillars of Mohammed bin Salman’s plan to modernise and reform his country are crumbling. His plan to generate foreign investment by selling off five percent of Aramco on foreign stock exchanges has gone and now PIF, the main vehicle for diversifying his economy away from oil, is in chaos too.  
Many in the region would cheer MBS's demise. He has simply done so much harm to so many people, particularly in Egypt. In a post-oil era, MBS would lose his power of patronage, the power of an oligarch who can spend a billion pounds a minute and not blink.  
But the collapse of Saudi Arabia’s economy, which for decades has been the engine room of the economy of the whole region, would quickly be felt in Egypt, Sudan, Jordan, Lebanon, Syria, Tunisia - all of which send millions of their workers and professionals to the kingdom and whose economies have grown to depend on their remittances."

Friday, April 24, 2020

The repercussions of the oil glut on russian foreign policy

The magazine The American Interest analyzes the impact of the oil glut on strategic aspects of russian foreign policy: 

"While the economic pain may have yet to cross Putin’s threshold, Russia, like every other country, will succumb to this new reality. Putin’s official popularity ratings have dropped to the low 60 percent range and, perhaps more importantly, for over a year polls have shown that a large majority of the Russian people think the country is going in the wrong direction. They also think that more resources should be spent on domestic problems and that Russia should pursue policies that improve relations with the West.
Putin, of course, is no democrat; he can choose to ignore public opinion. But with oil prices at inconceivable lows, the Kremlin will have to make serious decisions on where to invest what will be increasingly limited resources. Russia’s military has historically been more active when fossil fuel energy prices soar and less so when they fall. When the economic crunch hits, Russia tends to cut back on training and exercises (often with devastating consequences) before it disrupts actual operations. But this is no ordinary shift in market forces. It is a combination of Putin’s hubris in starting an oil war he thought he could win combined with a crisis nobody saw coming. Something will have to give. Recovery will be difficult for almost every country, but especially so for a country almost solely dependent on carbon earnings."

You can read the rest of the piece via the below link:

https://www.the-american-interest.com/2020/04/22/how-the-oil-shock-will-contain-putin/ 

Neptune Energy finds gas reservoirs near dutch border

German Neptune Energy has announced that it found two gas reservoirs near the dutch border:

"Neptune Energy reports two wells found in the Emlichheim municipality in the Grafschaft Bentheim district. The Adorf Z15 natural gas well and the rings 6 crude oil well were successfully sunk and are showing the first positive results.
Both projects were started in the last quarter of 2019. The Adorf Z15 natural gas exploration well on the territory of the Hoogstede municipality reached its final depth of 3500 meters in the carbon formation in February 2020. The drilling rig was dismantled after the work was completed. Subsequently, Neptune Energy conducted extensive production tests on this new natural gas well. The result: up to 12,000 cubic meters of natural gas emerged every hour. “This is an excellent result for an exploration well. This will enable us to significantly increase our natural gas production in the region, ”says Dr. Andreas Scheck, Managing Director at Neptune Energy in Germany. A processing plant for the raw gas will be built at the well in the next few months. The medium is dried there before it can be fed into a natural gas pipeline. Permanent production is expected to start towards the end of 2020."

Wednesday, April 22, 2020

Oil war: Russia hit by threefold calamity

Russia is afflicted by the low oil prices but also by the economic downturn due to the Covid-19-pandemia and the stagnation of the national economy that ist hurt by sanctions; russian business leaders are becoming impatient writes german newpaper Die Welt:

"The fact that Vladimir Putin was so quick after a phone call with his counterpart Donald Trump to participate in an oil cut together with Opec and other oil countries speaks volumes. Just a month earlier, he had the Saudis blown away with this request - and thus triggered an unprecedented drop in prices from $ 66 to $ 22 per barrel of the Brent variety, because Riyadh flooded the market out of anger.
Maybe he had simply underestimated the Saudis. Just as he had underestimated the corona virus. For a long time, the Kremlin had been unimpressed and kept relatively quiet. On March 17, Putin had declared in Crimea that everything was actually under control.
In the meantime, like many other countries, things blow up in his face. More precisely: in contrast to most countries even more. It is now becoming clear that Russia is getting a triple blow. On the one hand, the economy was stagnating, among other things because of the Western sanctions and the associated isolation, with growth of 1.3 percent."


Shouting match between Putin and MBS sparked oil war

The Middle East Eye writes:

"A telephone call last month between Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman degenerated into a shouting match just before Riyadh decided to flood the market with oil in a move which sent prices spiralling.
Saudi officials with knowledge of the disastrous call told Middle East Eye that the row threatened to undo months of detente between the two countries, in which a significant arms trade was also agreed."

Monday, April 13, 2020

Professor Alan Riley gets the facts straight on ICIS article about Nord Stream 2


A ICIS publication on Nord Stream 2 of April 1st 2020 displays astonishing factual errors.


Fortunately London law professor Alan Riley rectifies them extensively:



When Galicia was a petroleum power

Few people know that barely one hundred years ago Galicia was a petroleum superpower.Who knew that this remote part of the Austro-Hungarian Empire, now a region in western Ukraine, was third in the rank of oil producers in the world by the turn of the century?
The blog "Forgotten Galicia" - worth reading - took this interesting article from the blog https://kehilalinks.jewishgen.org/Drohobycz/index.html




"From the middle of the nineteenth century, the history of the Jews of the Drohobycz
Administrative District was closely connected with the history of the petroleum industry. As
the demand for naphtha lamp oil grew, the oil-rich areas on the northern slopes of the
Carpathian Mountains, including Drohobycz, Borysław, Tustanowice,Schodnica, and other
towns in the district became known as "Galician California." The discovery of black gold 
attracted hundreds of speculators and people seeking their fortunes. The Jews of the area
were directly involved in this business from its early beginnings. Hundreds found 
employment as labourers and later as skilled workers in the industry. Some made and 
some lost fortunes; most laboured under appalling conditions."