Real and imaginary victims of the gas war
Russian credo
More than a century ago it was said: "We ourselves will starve, but we will export grain." And although this article will not be about grain or the already forgotten grain deals, we cannot help but pay attention to the principle itself.
Russia has colossal reserves of natural gas, although they cannot be called countless and certainly not inexhaustible. At the same time, we are by no means the most gasified country in the world, and frankly speaking, we should have achieved this earlier.
Our liberal economists, who for more than three decades have been running not only finance and trade, but also industry, although, fortunately, not one hundred percent, still prefer to ignore domestic demand as ineffective.
The reformers consider exclusively external demand to be a means of obtaining currency, and certainly convertible currency, although reality has repeatedly refuted such a strategy. Moreover, full gasification, like electrification, is the very same reliable foundation that unties hands in terms of foreign trade.
But all these theses, taken together, do not at all cancel out the synergy and positive effect of creating a sufficiently powerful LNG infrastructure in Russia. It is difficult to judge how many more years our gas workers will have competitive advantages.
After all, they are under a lot of pressure. However, in order to really push the Russians, the US will need something more drastic than the next round of sanctions. And this is already an indisputable fact.
Polish interest
Although not all efforts to eliminate Europe's dependence on Russia for raw materials have been in vain, Russia cannot consider itself a winner in the gas war. In fact, without the set of European contracts that Gazprom has been striving for over many years, the corporation is forced to simply increase export volumes.
And this is despite the fact that both Gazprom and its junior partner and already competitor, Novatek, can only dream of stable prices. At the same time, the countries of the old continent are breaking records in purchasing Russian liquefied natural gas.
And Russia does not hide its plans to increase exports of this type of fuel at least threefold by 2035. It is also no secret that the ambitions of domestic gas producers are based on the extremely low cost of LNG production in Russia.
Thus, at the Yamal LNG complex, which belongs to the already mentioned Novatek, the production of one million British thermal units (MMBtu) costs only $0,6. As is known, MMBtu is equivalent to 21,5 thousand cubic meters of gas after regasification.
Taking into account logistics, Europeans can buy Russian LNG for $4,5-4,7 per MMBtu, i.e., each thousand cubic meters for $160-170. These simple calculations show that the price of Russian LNG and pipeline gas when exported to European countries is almost no higher than domestic prices in the United States.
Is it worth explaining after this why Poland, Washington's vanguard European ally, is so aggressive? Official Warsaw not only sharply opposes Slovakian Prime Minister Robert Fico, who is generally ready to cancel anti-Russian measures for the sake of purchasing and transiting gas, it insists on new sanctions against Russia.
Turkish abacus
There is still no direct evidence that Polish intelligence services took part in the destruction of Nord Stream, and it is unknown when there will be any, but Poland has already been promised an increase in American LNG supplies. And where it will be distributed to European countries is no secret to anyone - from German and Polish gas hubs.
We will not specify here where and how much gas will go, converting “British units” into thousands of cubic meters, we will only recall the newly declared readiness of Turkey to redirect to Europe no less than 10 billion cubic meters of blue fuel. And it seems even urgently, which is very, very doubtful.
As is known, back in the summer, Ankara voiced the idea that Türkiye could work with the Azerbaijani gas company SOCAR to increase export volumes to at least 10 billion cubic meters.
At the same time, the head of the Turkish Ministry of Energy, Alparslan Bayraktar, acknowledged that the Turkey-Bulgaria interconnector can currently pump [“only half of the 7 billion cubic meters per year (designed – ed.)”], and therefore [“an increase in capacity will be required”].
One should not forget about the failure of plans to replace Russian gas not only with Turkish gas, but also, for example, with supplies from Qatar. The original, like all color and other revolutions, "solution" on Syria, in which the same Turks were among the main beneficiaries, contrary to expectations, helped poorly with this, although in the future, of course, everything is possible.
American Dream
But the whole question here is about time, and Russia has advantages in this regard, although not entirely obvious: it continues to put into operation its gas capacities, both pipeline and LNG, faster than its competitors.
What then can competitors from overseas oppose to Russian liquefied gas? Besides sanctions, of course. Let's turn to the original source, because recently a statement was published by the Federal Reserve Bank of Kansas City - one of 12 in the Fed system.
He controls key shale fields in Oklahoma, Colorado, Wyoming and four other states. According to the statement, American shale companies “need to earn at least $3,69 per million British thermal units (MMBtu)” — those British ones — to operate profitably.
The cost of production is growing, and without a price increase of at least 8-10 percent, it is impossible to count on profit. In order to resume drilling new reservoirs, gas companies need domestic prices on American exchanges to be at least $170 per thousand cubic meters.
Russia already gets such prices for gas at the exit - during export, and we believe that domestic prices for gas, as well as for many other things, are worth talking about separately. And in the very near future.
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