Author: Rong ping source: official account: Rong Ping (ID: rongping898) has been authorized to reprint
Putin has once again taken action on European energy!
According to Gazprom, because the only compressor left in the “Beixi” pipeline needs technical maintenance, the gas supply of the pipeline needs to be cut off from 20% to 0 for 3 days.
The three-day suspension seems to have little effect, doesn’t it? But Europeans can’t sleep anymore!
Why? Because the Russian side said that “if there is no technical failure”, the gas supply will be restored in three days.
Who has the final say on whether there are “technical failures”? Russia!
This means that Putin has dropped an “indefinite bomb” in public, warning Europeans that it is possible to restore gas supply, stop it more or reduce it. It depends on your performance!
This makes Europe very anxious.
You should know that it is autumn, and now Europe is frantically storing natural gas for the winter. However, according to the data of the International Monetary Fund, the comprehensive gas storage rate of European countries is only 66%. If Russia stops gas now, Germany, Italy, Austria and other countries will suffer from 15% energy shortage, and Eastern European countries such as Czech Republic and Slovakia will face up to 40% natural gas gap!
This is still calculated according to normal conditions. If this year is a cold winter, how can we spend this winter?
Originally, it would have been very difficult for Europe if Russia did not come out. Affected by the reduction of Russian pipeline supply, the continuous high temperature and drought, and the soaring demand for gas storage in the past few times, the price of natural gas in Europe is like a monkey hanging from the hip, and has a tendency to soar.
Last week, the natural gas futures price of Dutch TTF, the “European natural gas vane”, stood at a high of 300 euros / megawatt hour, 10 times the price of the same period last year!
When it comes to electricity prices, the electricity prices in Europe have also doubled. For the first time in history, the “benchmark electricity price in Europe” has risen to more than 1000 euros / megawatt hour, which is nearly 7 yuan per kilowatt hour!
How are you going to live?
At this time, Europe, which has almost no choice, can no longer withstand any threat of production reduction or supply interruption from Russia!
China, the Savior of Europe?
Just in order to prevent Putin from doing this, a few months ago, Europeans who were afraid of being frozen began to look for gas all over the world.
From Qatar in the Middle East to Norway in northern Europe, from Azerbaijan in Eastern Europe to Canada and the United States in North America, and from pipeline natural gas to LNG, Europeans sweep away goods at any cost.
But the most surprising thing is that China is still on this list.
It is reported that EU countries are buying “excess” Chinese LNG through the spot market to increase winter reserves.
As we all know, the prices in the spot market follow the market. Under the current situation of soaring energy prices, there is one characteristic: expensive.
So now that LNG is sold, China can pull up a handful of European wool!
It is said that a Chinese LNG trader has recently made profits of more than 100 million US dollars by reselling LNG to European buyers.
According to the data of the financial times, China’s total LNG resale volume in the first half of the year may exceed 4 million tons, equivalent to about 7% of Europe’s natural gas import prime minister in the same period.
Sinopec alone disclosed that it has so far resold more than 3 million tons of “excess LNG” in the international market.
Nikkei Shimbun lamented that “thanks to China’s resale of LNG, Europe seems to be able to avoid the energy shortage in winter and achieve the original gas storage goal before November”.
Although it is not without the suspicion of stirring up Sino Russian relations, it also indirectly shows that Chinese energy enterprises do not earn less in this respect.
The key is that it’s easy to make money. After all, most of our natural gas is purchased at the long-term contract price. Now it’s sold at the spot market price. The price difference is obvious. What’s more, the delivery process may be saved, and Europeans can directly go to the seller’s port to pick up the goods!
The last time this kind of good thing happened was in March this year. Sinopec resold the LNG that trump forced China to buy to Europe and transported it from American ports to European ports. Sinopec made a profit easily.
We have caught up twice in a row. When have our Chinese energy enterprises been so proud?
Of course, there is also a trace of “abnormality” behind this matter.
According to the situation in previous years, China is the absolute king of the international energy market. Just last year, China’s natural gas demand also recorded the fastest growth rate in history. The LNG demand increased by 18% over the previous year, overtaking Japan to become the world’s largest LNG importer at one fell swoop, and the proportion of spot purchase was as high as 39%.
Then why didn’t you have enough to eat last year? This year, you’re so well off?
First, the sluggish demand caused by the epidemic and other factors has led to a decline in the annual growth rate of natural gas consumption, so the pace of procurement can be relatively slow.
Secondly, compared with Europe, our supply side is stable.
At present, energy in the international market is too expensive, and the situation in Russia and Ukraine is unclear. There is no sign of easing the sanctions imposed by the West on Russia. The wave of International Winter reserves has pushed energy prices up. According to the scale of China’s natural gas imports, the burden of large-scale buying is too large.
Then what shall I do? Stabilize supply from two aspects.
First, expand domestic production capacity.
According to the statistics released by China’s National Bureau of statistics on August 15, China imported 8.7 million tons of natural gas in July, a year-on-year decrease of 6.9%; The production of natural gas was 17.1 billion cubic meters, an increase of 8.2% year-on-year, 7.8 percentage points faster than last month, and the average daily output was 550 million cubic meters.
From January to July, China produced 126.7 billion cubic meters of natural gas, an increase of 5.4% year-on-year. The import of natural gas was 62.21 million tons, a year-on-year decrease of 9.6%.
In other words, while reducing imports and even import arbitrage, we are also accelerating domestic production to offset the risk that international energy prices will drive domestic prices higher.
Second, the reduction of imports mentioned here does not mean that all types of imports have been reduced.
In the whole first half of the year, our overall natural gas imports did decrease by 8.9%, but the main reason was that LNG imports decreased by 19%, while pipeline natural gas imports increased by 10%.
As mentioned above, the proportion of China’s spot LNG procurement in 2021 will be as high as 39%, and the spot price will follow the market. When the market price is high, it will be slaughtered, such as Europe, which now collects gas at the market price.
This is the main reason for China’s import decline this year.
Our current LNG orders, basically excluding spot purchase, are long-term contracts of 10-20 years, with stable prices, which is equivalent to structural optimization and optimization of risks.
The increase is mainly pipeline natural gas.
To put it bluntly, there is more pipeline supply from Russia.
Now, with the friendship between Russia and Europe, it is certain that in the future, Europe will gradually implement the strategy of energy diversification, get rid of its dependence on Russian gas, and reduce its demand for Russian gas. Then China is almost the only potential big customer of Russian pipeline natural gas.
Therefore, the more violence there is in Europe, the greater the growth space of Sino Russian energy cooperation.
From January to August this year, while Putin choked off gas to Europe, the natural gas supply of Russo gas to China through the “Siberian power” pipeline increased by 60%, and the gas transmission volume of the pipeline exceeded the agreed gas supply for a long time. On July 24, it directly refreshed the historical gas transmission volume!
Of course, due to the pipeline laying problem, the current supply is still limited, but the momentum of growth is very fast.
For example, the “Siberian power” natural gas pipeline began to supply gas at the end of 2019. In 2020, the gas supply reached 4.1 billion cubic meters, in 2021, it will increase to 10.4 billion cubic meters, and in 2025, it will reach 38 billion cubic meters.
In addition, China and Russia have signed an agreement to export to China the natural gas previously mainly supplied to Japan’s Far East and hasarin region, which also has an annual volume of 10 billion cubic meters.
If we include “Siberian power-2” and its natural gas pipeline “Eastern alliance” extended through Mongolia, Gazprom’s natural gas exports to China can increase by another 50 billion cubic meters every year.
With Russia’s supply as the base, China’s pressure on the supply side is not great. Even if it is a cold winter this year, we still have coal production capacity as the base. It is impossible to have an energy panic like that in Europe.
Therefore, China’s LNG can be safely resold for arbitrage!
Europe: who is worse than me!
Although Japan has given China the high hat of “solving Europe’s winter energy storage dilemma” with bad intentions, we all know that the LNG resold by China is just a drop in the ocean and can not solve Europe’s energy problem at all.
After all, even if Europe survives this winter, as long as the supply problem of Russian gas is not solved, Europe will have to face an energy crisis for a long time in the future.
How can we really solve this problem?
The first way, according to Biden’s promise of patting his chest, depends on me to make America bigger!
But this is also the most dramatic part of this matter. In the first half of the year, when Biden wanted to win over the EU to impose sanctions on Russia, he did make a commitment to the EU on natural gas exports.
However, energy prices are high, and now Biden’s support rate is low. The United States does not have enough energy supply. May Biden transfer American natural gas to support the European Union?
So some time ago, when the EU was in an energy crisis, the natural gas export port of the United States was directly bombed. The consequence of the bombing was that the export was restricted, and the natural gas originally scheduled to be exported remained in the United States – Europe’s life and death could not be controlled!
What’s more, now that the EU has no choice but to survive the winter, what do Americans do?
Recently, US Secretary of energy Jennifer Granholm told us energy companies that they should not increase energy exports to European allies, because the United States should increase its own inventory!
We agreed to look at the stars and the moon together? What about helping the EU diversify its energy supply?
Biden, this scum man!
OK, as we said earlier, the United States is obviously suppressing energy exports to Europe. Why does the Minister of energy still say this?
Like China’s resale of LNG, it’s so easy for Europeans to make money now!
Loading a LNG ship at a price of US $60 million at a US port and transporting it to Europe turns into 275 million dollars. One shipment can earn nearly 200 million dollars in profits. In the words of Wall Street, “what we are talking about now is not profit percentage, but profit multiples”. Under such multiples, who is not willing to sell gas to Europe?
According to the International Energy Agency, more natural gas was transported from the United States to Europe in June than Russia through pipelines.
Therefore, the United States has indeed sent a message to Europe, but it has nothing to do with the contract price signed by Biden. American capitalists are the most ruthless when they earn European money, and they are almost picking up the garbage for Europeans!
But even with such high profits, the US government is not willing to give gas to the EU now. What is the value of Biden’s promise?
Therefore, Europe must “save itself”, that is, another way to improve relations with Russia.
This is also the most pragmatic way. After all, the focus of the Russian European energy conflict is Ukraine. Europeans can’t live happily now. What’s the point of supporting Ukraine now?
So now, many voices, including the deputy speaker of the German Parliament and the mayors of many places, are calling for the activation of “beixi-2” – a signal to ease relations with Russia.
Their reason is also very tenable – the natural gas in one pipeline is not “dirtier” than the other. Since Germany is using the natural gas imported from the “Beixi” pipeline, why can’t it use “beixi-2”?
But why does Germany not use “beixi-2”? Because of this crux, the Germans can’t control the US sanctions on this pipeline!
So Putin pinched the “Beixi” pipeline, in part because he was pushing Scholz and even the whole of Germany to make them determined to fight the United States!
What did Scholz do? Although his support for Ukraine has dropped sharply, which is obviously inconsistent with the pace of the United States, on the Russian issue, he would rather put coal-fired power generation and nuclear power plants into operation under pressure than relax sanctions and energy on Russia.
On the other hand, others are very active.
After Putin completely cut off the “Beixi” pipeline recently, von der Leyen also came out and proposed to Putin to “carry out structural reform of the power market and get rid of dependence on dirty Russian fossil fuels”.
The German Foreign Minister even said that he would support Ukraine “no matter how voters choose”.
Looking at the yellow vest movement in France in 2018, macron only increased the fuel tax by a few cents, and hundreds of thousands of people in France revolted. Is there still room for “no matter how voters choose” in Europe now?
With these people, how can the “Beixi” pipeline not need to be repaired? How can Europe not lack natural gas in the next few years?
At the end of the article, the author has something to say
It is not only China and the United States that collect European wool.
For example, India bought discounted Russian oil and sold it to Europe at a higher price;
For example, Saudi Arabia imports fuel from Russia and then “sells its crude oil to the international market at a higher price”, most of which are also sold to Europe.
Even Iran, a big natural gas producer, is importing Russian natural gas, hoping to take advantage of the loosening of sanctions to sell it to Europe for money
Anyway, everyone is happy that all parties have made money and Europe has gained the face of supporting Ukraine. Who cares about the negative impact of the euro becoming the biggest loser in the Russian Ukrainian war, the possible turmoil in European society, and the possible rift in the EU due to uneven energy distribution?
Of course, the whole EU is not without sober examples.
For example, Hungary.
At a time when the European Union called for “wearing more sweaters”, “wearing blankets at home”, “washing only four parts when taking a bath”, “skin self-cleaning” and “countries reducing their demand by 15%,” Hungary was negotiating with Russia, and finally succeeded in winning Putin to supply Hungary with additional natural gas for the winter on the basis of the original long-term agreement.
According to the price of the original long-term agreement, other European countries are expected to cry with envy!
This is the second way we mentioned earlier, to improve relations with Russia and save ourselves outside the United States.
It is a pity that there is only one Orban in such a big EU.
So, people are willing to stand in the pit. If we don’t take the opportunity to collect them, is it too disrespectful?