New Russian gas deals are "enough to make even a seasoned energy observer's head spin"

New Russian gas deals are "enough to make even a seasoned energy observer's head spin". (csis).

In the twelve months since the collapse of global oil prices and the imposition of Western economic sanctions against Russia, the number of new Russian gas export project announcements has skyrocketed.

Only last month, Gazprom signed a memorandum of understanding (MOU) with three European companies to build a second large gas pipeline system under the Baltic Sea called Nord Stream II.

This was preceded by the announcement in December by President Vladimir Putin himself of the cancellation of the ambitious South Stream gas pipeline under the Black Sea to be replaced by an equally grandiose project, soon to be dubbed Turkish Stream.

In Kurdish a donkey is called: 'Kerdogan'

Both Nord Stream II and Turkish Stream are designed to bypass the critical transit route through Ukraine utilized by 40 to 50 percent of Russia’s current gas exports to Europe.

Russia and Gazprom’s position on whether gas transit through Ukraine will continue after the current agreement expires in the not-too-distant future flip-flopped within a matter of weeks recently – first proclaiming that all transit will cease after 2019, then declaring that negotiation of a new deal has been ordered by President Putin.

In the past year, we have also seen the supposed conclusion of not one but two large gas deals with China. Together with numerous previously proposed liquefied natural gas (LNG) and export pipeline projects, this picture is enough to make even a seasoned energy observer’s head spin.

To make matters worse, the mainstream press tends to report each one of these announcements, no matter how fanciful, as if they are all realistic projects that will be completed by the notional target dates even as Russia’s financial position continues to deteriorate.

The total cost of these projects is somewhere between $150 and $200 billion, and it is unlikely that Russia (even together with its prospective partners) could muster the necessary capital to complete most of them amidst Russia’s low oil revenue, budget deficits, and falling GDP.

Instead, the raft of announcements, postponements, and cancellations in June and July of 2015 suggest that Russia is groping for a viable gas export strategy. Read the full comprehensive report here.

Gazprom signs key Nord Stream-2 deal with EU companies, avoids need for gas transit through Ukraine.

Gazprom signs key Nord Stream-2 deal with EU companies, avoids need for gas transit through Ukraine. (RBTH).

Russia’s gas giant Gazprom has signed a binding shareholders’ agreement with European energy companies for the construction of the Nord Stream-2 pipeline from Russia to Germany. The landmark deal was inked at the Eastern Economic Forum, held in Russia’s far eastern city of Vladivostok on Sept. 3-5.

Gazprom will own a controlling stake, while Germany’s E.ON and BASF/Wintershall, Austria’s OMV and Royal Dutch Shell will receive 10 percent each, while France’s Engie will receive 9 percent.

Economic interests take priority

In itself, the signing of the shareholders’ agreement for Nord Stream-2 is already evidence that the EU, as before, has no common position either on relations with Gazprom as a whole or on today’s most pressing issue – that of gas transit through Ukraine.

The largest power companies in the UK, France, Germany and Austria signed the project, whose implementation will minimize the transit of gas through Ukraine, which all these states continue to support politically. However, the agreement is contrary to the position of Brussels; according to Vice-President of the European Commission Maroš Šefčovič, there is no need for any gas pipelines bypassing Ukraine.

“Germany believes that Ukraine should be supported, but the path to democracy and reform is very long, and we are losing time; the Ukrainian gas transportation system must be modernized, but no one is ready to invest,” said Alexander Rahr, research director of the German-Russian Forum, adding that plans for Nord Stream-2 do not violate EU law, including the Third Energy Package.

Southern Europe left high and dry

The shareholders’ agreement is a serious blow to the south-eastern countries of the EU, which were prevented by the United States and the European Commission last year from building the South Stream pipeline, intended to supply Russian gas to Southeast Europe via an undersea pipeline and a distribution hub in Turkey.

Now it is proposed to build a gas pipeline which, with a capacity of 55 billion cubic meters a year, which will bring billions of dollars in transit fees not to Bulgaria and Hungary, but to Germany and the Czech Republic. In addition, virtually all Russian gas will reach Europe through Germany, providing German gas pipeline companies with stable income for decades.

“The participants of South Stream – Bulgaria, Greece and Italy – are the countries that do not have enough weight to make decisions contrary to the general political line, but Germany will be able to,” said Fyodor Lukyanov, head of the Council for Foreign and Defense Policy, an independent Moscow-based think tank. Hmmm.......Guesss the Turkish stream will remain a 'Turkish dream'? Read the full story here.

Minority shareholding: The shares which gives potentially power to Gazprom and Rosneft over the EU energy market.

Minority shareholding: The shares which gives potentially power to Gazprom and Rosneft over the EU energy market.(delfi). A Must read! Read the full story here.

Video - Canada's PM Harper: "Putin's invasion of Ukraine ... must not be allowed to stand"

Ukraine Today: Ukraine's debt to private creditors should be restructured...in plain words: "We are broke and won't pay our debts"....expect fireworks.

Considering it's an election year for Harper and the large number of Ukrainian Canadians, it's 'normal' to hear this kind of talk.

Remains the fact that Ukraine is broke, has a mountain of debts from not paying their bills and no gas reserves for coming Winter.This situation is bound to escalate.

Putin has two options: Option slow retreat and the option of an insane escalation.

Putin has two options: Option slow retreat and the option of an insane escalation.(Espreso) [Google translate].

- Hello, Andrei. I read your tweet, where he wrote that Putin now has a choice: "To lose power as banal thief or lose power as the leader of the embattled Russian world." Once you have written that the Federation Council may soon come. Could you explain what you mean

- The fact that Moscow was made two very curious statement. 

Chairman of the Federation Council, Mrs. Matvienko, Russian senators asked not to go too far from Moscow, as in the near future may be called an extraordinary meeting of the Federation Council. This could explain some bills in the Duma, they say they need to take place before the summer holidays by the Federation Council. But just half an hour after it was made, Mr. Sands, who somehow suddenly decided to remind the city and the world that actually Putin can once again turn to the Federation Council with a request to give him authority to use the Armed Forces beyond our borders. This is all very worrying signals. They can, of course, be considered as part of the continuous military blackmail, which deals with Putin. But right now I would rate the likelihood of military escalation as a higher than even a few weeks ago.

Quite close to my assessment of the situation given, for example, is very far away from me in the next man Prohanov Sabbath Solovyov. However, he has formulated it somewhat differently according to their political outlook. He said: "We have a choice of either World War III or the second restructuring." The second restructuring in its language - Putin's retreat, his political defeat and displacement. Prohanov continued: "Perestroika, we still lose, and World War III can be won. So let's go to the Third World War. "

I believe that something similar can move and head of Putin himself. Therefore, the next few days, a week - they are very important. And it's strange attack at Marinka two days ago also seems to me not accidental, but an attempt to "feel out" the situation including within his own entourage. . I think that everything will depend on how Putin single-handedly controls the situation.

We are going through very troubled days. An intermediate situation can not continue indefinitely. Choice - escalation or slow retreat - the Kremlin in general, or Putin, if he is single-handedly controls the entire system of government should take in the near future.

- Recently, there are reports from Russian sources, with reference to the same Valentina Matvienko, that the Federation Council can vote for the accession of Transnistria. And, given that Ukraine has blocked Transnistria, this news sounds very anxious. Do you think Russia will dare even to the annexation of Transnistria?

- You know, taking off his head, the hair do not cry. Transnistria, it is a tactic. The question is different: whether the regime will be decided on a real war with Ukraine, Moldova and, indeed, with the West? Where he decides: the Donbas, Moldova, or maybe it is now actively offering Russian media to throw special squad to Odessa, grab Saakashvili, bring him in a cage to Moscow and Putin, his one seat hangs - it is technical details.

Very anxious, of course, what is being discussed and aggravation of the situation around Transnistria. It simply underscores that the scenario of military escalation, in spite of all his madness, is regarded very seriously. And where they will arrange a new provocation: in Marinka, Tiraspol or in Odessa - this is not essential. Now Putin will have to decide for themselves the question or slow, very boring, viscous and hopeless retreat, or challenge the West and the fate and the insane escalation, in which, as said Mr. Prokhanov, "What if we have a chance and win ? '

- What do you think, what will be the reaction of the West, because, in principle, have already begun and military provocations is absolutely clear that the Minsk Agreement thwarted?

- Today I watched meeting of the Security Council. At that time Samantha Power "drove a muzzle on the table" Churkin accident. But the Security Council in fact does not solve anything. Performances of the British and American representatives were, however, rigid and clearly indicate what they see as the culprit running escalation.

I have no doubt that the reaction of the West to be very sharp. I think that the basis for this conclusion is all that is said and what makes the West over the past two to three weeks with respect to Putin and the Kremlin's power. The West warned Moscow about the consequences of military escalation in very uncertain terms.

The point is not to be sympathetic to the Western Ukraine or the absence of such sympathies. The West is now most acute problem solve their own security. Because about Ukraine because he could tell, and he said, Obama and Rasmussen on the first day of the conflict a year ago: "Ukraine is not a member of NATO, so our military intervention is absolutely impossible." And there will be a military intervention. Yes this is not necessary. The West has enough economic and political means to inflict a humiliating defeat Putin.

They certainly it will cause, because if they would allow Putin to triumph in Moldova, Ukraine or anywhere else, then the next day his "little green men" will appear in the Baltic states on the territory of a NATO member country. 

There will not be able to avoid a war with Russia. If Western politicians betray Estonia - a member of NATO, do not fulfill their obligations under para. 5 of the NATO Charter, then it will be the infamous end of NATO, the end of the West as a subject of world politics, leaving the United States from the world stage as a guarantor of the security of the West.

And if they come to the aid of Estonia - a war with nuclear power, led by a person in a different reality, and brandishing nuclear weapons. It's unthinkable choice. Therefore, as I see the situation, the West made a firm decision not to bring the situation to such a choice, and stop Putin here and now in Ukraine, with the maximum use of a set of economic and political means, but «without boots on the ground».

Pick up the rhetoric of recent days. All influential Western leaders speak with one voice. Obviously, they were discussing the issue and Putin came to a common denominator. Thus, the Canadian Prime Minister said: "As long as Putin in the Kremlin - is no place for Russia in the Group of Eight will not." However, shrederovsky "fosterling" Steinmeier - Germany's foreign minister, to try something squeak that "in fact, we need Russia to solve some issues in Iran and Syria." But then he straightened Merkel sharply.

For the West, came a kind of "moment of truth". This situation is quite unusual for Putin. His game with the nuclear blackmail in political poker burst. For a year these Trenin, Lukyanov, Karaganov on any "informal talks" with the American political scientists sincerely whispered: "Well, understand, after all, Ukraine more important for us than for you. Therefore, we will raise rates until the use of nuclear weapons. You still flinch and turn away. " West did not flinch, did not give up and will stand up to Putin is very tough. Therefore, a new and very unpleasant situation for him. Hmmm....If i were Putin the 05 July at 03,00 AM would seem a good time to start. Read the full story here.