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Gazprom starts clock on Chinese gas pipeline

The first welds of a pipeline meant to deliver Russian natural gas to China should be set within the next two months, the chairman of Gazprom said. Gazprom said it planned to start delivering large-diameter pipes for what it’s calling the Power of Siberia natural gas pipeline to China in July. "We have a particular action plan," Gazprom Chairman Alexei Miller said in a Wednesday statement . "Our objective is to weld the Power of Siberia first joint already this August." The Russian energy company said it started working on the infrastructure necessary for the pipeline almost immediately after signing a contract for gas to China in May. The contract between Gazprom and China National Petroleum Corp. is for 30 years and calls for 1.3 trillion cubic feet of natural gas per year. Gazprom has sought entrance into the growing Asian market in an effort to diversify an asset […]

Posted On : Published By : Tom Whipple
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Putin Advisor Proposes “Anti-Dollar Alliance”

It has been a while since both Ukraine, and the ongoing Russian response to western sanctions (which set off the great Eurasian axis in motion, pushing China and Russia close together, and accelerating the “Holy Grail” gas deal between the two countries) have made headlines. It is still not clear just why the western media dropped Ukraine coverage like a hot potato, especially since the civil war in Ukraine’s Donbas continues to rage and claim dozens of casualties on both sides. Perhaps the audience has simply gotten tired of hearing about mixed chess/checkers game between Putin vs Obama, and instead has reverted to reading the propaganda surrounding just as deadly events in the third war of Iraq in as many decades. However, “out of sight” may be just what Russia’s political elite wants. In fact, as VoR’s  Valentin Mândr??escu reports, while the great US spin and distraction machine is […]

Posted On : Published By : Tom Whipple
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The Third Russia-Ukraine Gas War

At 10 am on Monday, June 16, 2014, Gazprom, a Russian gas monopoly, cut off supplies of gas to Ukraine. This is the third time in the last ten years when Gazprom has tried to use a cut-off to force the Ukrainian government to accept a deal it did not want to accept. In the previous two cut-offs —in January 2004 and January 2009, that is, in the middle of bitter cold winters—Ukraine bowed to the pressure and agreed to unfavorable contracts with high prices, tough clauses, and heavy penalties. Each time, Russia used Gazprom and energy prices as a political instrument to pressure pro-Western governments in Ukraine. Although the current cut-off is motivated by the same political factors, the outcome could be different this time. In a nutshell, Gazprom wants to sell gas to Ukraine at $485 per thousand of cubic meters. Ukraine insists on the price of […]

Posted On : Published By : Tom Whipple
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Gazprom Expects $25 Billion Prepayment in China Gas Deal

Gazprom OAO will receive $25 billion from China as a prepayment under the terms of a $400 billion contract Russia’s natural-gas monopoly signed last month though the details and timing of payments and delivery of the gas aren’t yet finalized, the company’s deputy chief executive said Wednesday. Gazprom’s Alexander Medvedev said he would not disclose the price that China National Petroleum Corp. has agreed to pay for the Russian gas but insisted the deal will make money for the state-controlled Russian energy group. The lack of details of the contract, which is seen by analysts as the Kremlin’s attempt to reduce its dependence on the European gas market, has raised questions in Russia about whether the criteria for striking the deal were primarily political rather than economic . In the […]

Posted On : Published By : Tom Whipple
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Gazprom Demands Ukraine Prepays for Gas

Russian state gas giant OAO Gazprom said Monday it will only ship fuel to Ukraine if it pays in advance, making good on a threat that could lead to supply cuts affecting European customers after late-night EU-mediated talks on debt repayment failed to yield a deal . Gazprom said it hadn’t received payment for a debt it put at $4.458 billion by the Monday deadline it had set. "Ukraine will receive gas only in the amounts it has paid for," Gazprom said. There was no immediate reaction from Kiev. The shift to prepayment is likely to lead to a reduction in supplies to Ukraine and could affect Russia’s shipments to Europe, the bulk of which go through Ukraine. Industry analysts say the initial effect on European markets of any supply disruption may be limited because of current […]

Posted On : Published By : Tom Whipple
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Russia expects major eastern oil investments

Major investments in oil operations in the eastern part of Russia will boost export potential by 2035, Deputy Prime Minister Arkady Dvorkovich said Monday. Dkorkovich said investments in the oil industry in eastern Russia are expected to grow by more than $1 trillion. "Oil production and supplies will grow in the eastern region of the country," he said . "The part of the eastern direction in the total exports of oil and petroleum products will increase from 12 percent to 23 percent." Russia is one of the world’s leading oil producers, producing more than 10 million barrels of oil per day on average. Most of the country’s oil fields are in the western region of Siberia. The head of a Russian joint venture between Shell and Gazprom Neft signed an agreement in January to use hydraulic fracturing to tap into an oil formation in Siberia. When combined with gas […]

Posted On : Published By : Tom Whipple
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Ukraine crisis: Russia halts gas supplies to Kiev

Ukraine says Russia has cut off all gas supplies to Kiev, in a major escalation of a dispute between the two nations. "Gas supplies to Ukraine have been reduced to zero," Ukrainian Energy Minister Yuri Prodan said. Russia’s state-owned gas giant Gazprom said Ukraine had to pay upfront for its gas supplies, after Kiev failed to settle its huge debt. Gazprom had sought from Kiev $1.95bn (£1.15bn) – out of $4.5bn it says it is owed – by 06:00 GMT. The Russian firm said it would continue to supply gas to Europe. Russia-Ukraine ties remain tense since Moscow annexed Crimea in February. Kiev says Moscow backs separatists in the east of the country. Russia denies the charge. ‘Blackmail’ "Today, from 10:00 Moscow time, Gazprom, according to the existing contract, moved Naftogaz to prepayment for gas […]

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Russia’s Gazprom reduces gas to Ukraine after deadline passes

Russian natural gas exporter Gazprom reduced supplies to Ukraine on Monday after Kiev failed to meet a deadline to pay off its gas debts in a dispute that could disrupt supplies to the rest of Europe. Announcing that Ukraine will now only get gas it pays for in advance, Moscow put the onus on its neighbour to guarantee the European Union receives supplies that transit through Ukraine. Kiev and Moscow failed to agree overnight on the price of future gas deliveries, with both sides refusing to abandon well-established positions: Russia offering a discount and Ukraine rejecting it as a tool for political manipulation. Talks were already difficult but were also clouded by the worst political crisis between Russia and Ukraine since the Soviet Union collapsed, including the shooting down of a Ukrainian military plane by pro-Russian separatists in the east of the country on Saturday and […]

Posted On : Published By : Tom Whipple
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Russia's Gazprom reduces gas to Ukraine after deadline passes

Russian natural gas exporter Gazprom reduced supplies to Ukraine on Monday after Kiev failed to meet a deadline to pay off its gas debts in a dispute that could disrupt supplies to the rest of Europe. Announcing that Ukraine will now only get gas it pays for in advance, Moscow put the onus on its neighbour to guarantee the European Union receives supplies that transit through Ukraine. Kiev and Moscow failed to agree overnight on the price of future gas deliveries, with both sides refusing to abandon well-established positions: Russia offering a discount and Ukraine rejecting it as a tool for political manipulation. Talks were already difficult but were also clouded by the worst political crisis between Russia and Ukraine since the Soviet Union collapsed, including the shooting down of a Ukrainian military plane by pro-Russian separatists in the east of the country on Saturday and […]

Posted On : Published By : Tom Whipple
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Ukraine’s Naftogaz Files Lawsuit in Stockholm Over Russia Gas

Ukrainian gas monopoly Naftogaz said Monday it is suing Russia in the Stockholm arbitration court to get a fair price for the natural gas it receives and to recoup $6 billion in what Kiev said was overpayment for gas deliveries over the past four years. After Moscow and Kiev failed to resolve a long-running dispute over Russian gas supplies to Ukraine, Russian gas giant Gazprom said Monday it would only ship fuel to Ukraine if it pays in advance. Naftogaz said in a statement it had filed a claim in the Stockholm court demanding a "fair and market price" for the gas that Gazprom ships to Ukraine. Kiev had been asking for a gas price of $268.5 per 1,000 cubic meters, the level that was agreed in late 2013 between Russian President Vladimir Putin and his ousted Ukrainian counterpart Viktor Yanukovych. On Friday, Kiev said it was ready to […]

Posted On : Published By : Tom Whipple