Russia-China gas mega-deal signed

[K. A. Pital]

Can North America provide Europe with enough natural gas to cut of Russia there entirely?

Short story: no. Longer story... no.

[mr friendly guy]

Can North America provide Europe with enough natural gas to cut of Russia there entirely? I don't like frakking, but it at least give us enough that if the infrastructure exists that might be what Obama's endgame is. Also would help to delineate a maritime Atlantic alliance vs an east Eurasian land alliance global balance of power.

I actually created a thread about natural gas from shale. Essentially some of the industry's predictions are overestimated. What this means is the shale gas would be an important part of the US energy needs, but its unlikely they can produce enough to challenge Russia's dominance, yet alone the cost of shipping it.

That being said... Asia does buy natural gas from Australia and nearby PNG. China signed a massive deal with us up to a decade ago if memory serves me right. We were so god damn happy our newspapers showed Hu Jintao giving us a ginormous birthday cake. At that time of course LNG was much cheaper so the Chinese were paying a very high price. However, whether its blind luck or foresight the Chinese arguably got the better end of the deal because prices shot up and they locked in prices. Currently Australia is working with conjunction with PNG to ship natural gas extracted from PNG into Asia. The first customer would be Japan and its due to ship shortly.

[LaCroix]

Even if the US had VAST quantities of gas to spare, shale gas is the most expensive gas. In fact, the amount of it we can recover is linked to the current market price. As in, people have to check if they could sell it for profit before they extract it - it's that expensive.

Now you have to pay to somehow send it to a harbor (which must be built), cool it down, and pump it onto a ship, which needs to travel all across the atlantic to unload, and comes back, empty.

And then, you need to at least match the price of Russian gas. Who sold 161.5 billion cubic meters at about 380$ per 1000m³, which is considered expensive.
Offloading price for LNG in Europe is about 10$/MMBtu, or 360$ per 1000m³, if my google-fu didn't fail me. And that's for cheap, non-fracked LNG. Fracked gas will of course be more expensive.
Gas prices in the Us are at about 6$ per MMBtu, currently. And that means that shale gas is barely worth extracting. Now add the cost to make enough ships to transport 161 billion m³, the fuel for them (with an empty return trip), harbor fees, the huge facilities needed to liquefy that much gas, more harbors at both sides, etc.

You'd need to dump trillions of $ into it to even start (and it would take decades to build that many ships and harbors, I'd guess)and then take a loss with every m³ sold. And Russia could always go down a bit with the price to stay in competition.

edit: I had a math error with mmbtu conversion, it's 28, not 24...

[K. A. Pital]

Indeed. $380 is already quite profitable, but $350-360 is still profitable, especially with existing pipes. Unless Europe wants to commit to an economic war that would devastate weaker perphery countries... I can't see that happening.

[Sidewinder]

Question for Stas Bush: In your opinion, what kind of relationship exists between Russia and China, and what kind do you believe it will develop into? At present, it seems comparable to the relationship between the Soviet Union and the US during World War 2, namely, those two are "allies" in the sense they have a common "enemy" (the US). If the current "enemy" disappears, will China and Russia then find a new enemy in each other?

[K. A. Pital]

Question for Stas Bush: In your opinion, what kind of relationship exists between Russia and China, and what kind do you believe it will develop into? At present, it seems comparable to the relationship between the Soviet Union and the US during World War 2, namely, those two are "allies" in the sense they have a common "enemy" (the US). If the current "enemy" disappears, will China and Russia then find a new enemy in each other?

Why? The relationship between Russia and China is more like the relationship between neighbors who are forced to make compromise, not because the US is a common enemy. China does not treat the US as an enemy, but regardless of whether the US or Japan are more or less hostile it always pays to have your northern borders secure.

[mr friendly guy]

I know some in the West envisage China wanting to go after Russia's far east even though the border issues have been settled. I don't just mean Tom Clancy. Fareed Zakharia blatantly mentioned that when he was interviewing Dimitry Medevev.

How big is that fear in Russia. Is it in the mainstream or just confined to ultranationalists?

[Fingolfin_Noldor]

I know some in the West envisage China wanting to go after Russia's far east even though the border issues have been settled. I don't just mean Tom Clancy. Fareed Zakharia blatantly mentioned that when he was interviewing Dimitry Medevev.

How big is that fear in Russia. Is it in the mainstream or just confined to ultranationalists?

It probably resides somewhere in their geopolitical calculus. But that's what the nukes are for.

[K. A. Pital]

I know some in the West envisage China wanting to go after Russia's far east even though the border issues have been settled.

It could have pursued an active settlement policy to prepare the ground then, considering Russian Far East had a massive depopulation wave in the 1990s, but there are barely several dozen thousand Chinese there now and the number isn't growing. Logic tells it's not on their to do list.

[Irbis]

Well, some idiots who forecasted that Russia would be selling at 200 per thousand cubic meters were wrong.

Funnily enough, local Russophobic press that were crowing about 200$ price for months didn't even bothered to admit how wrong they were and instead just changed tune to how "Russia is now resource colony, and how it must bother and wound the pride of last thinking Russians" Sometimes I wonder if they are really so illiterate, or if someone is actually paying them for this drivel.

I know some in the West envisage China wanting to go after Russia's far east even though the border issues have been settled. I don't just mean Tom Clancy. Fareed Zakharia blatantly mentioned that when he was interviewing Dimitry Medevev.

China has problem populating their own inner Mongolia territories (a number of built ghost cities that no one settles in). Even if they didn't have it, between them and Siberia there is an enormous, extremely sparsely populated country (Mongolia) with huge natural resources and no army to speak of. Why they would go for something belonging to nuclear power even if they wanted to if they can annex or buy Mongols?

It's as if these imbeciles never even looked at map

Funnily enough, Republic of China (Taiwan) claims whole of Mongolia and some pieces of 8 countries north and west of it, plus bits of India and Burma as Chinese territory, unlike PRoC.

[Sidewinder]

Funnily enough, local Russophobic press that were crowing about 200$ price for months didn't even bothered to admit how wrong they were and instead just changed tune to how "Russia is now resource colony, and how it must bother and wound the pride of last thinking Russians"

By "local", I'm assuming you're referring to the nation you live in, but which nation is that? The US? Finland? Ukraine?

Sometimes I wonder if they are really so illiterate, or if someone is actually paying them for this drivel.

Most likely, their hatred made them delusional (at least they're literate enough to recognize the number "200"). If a Russophobic politician paid for this drivel, they'd pay BIG MONEY for a BIG NAME advertising firm to COMPETENTLY promote drivel, backed by research with the facts twisted in ways that seem PLAUSIBLE to the average citizen.

[mr friendly guy]

China has problem populating their own inner Mongolia territories (a number of built ghost cities that no one settles in). Even if they didn't have it, between them and Siberia there is an enormous, extremely sparsely populated country (Mongolia) with huge natural resources and no army to speak of. Why they would go for something belonging to nuclear power even if they wanted to if they can annex or buy Mongols?

It's as if these imbeciles never even looked at map

Funnily enough, Republic of China (Taiwan) claims whole of Mongolia and some pieces of 8 countries north and west of it, plus bits of India and Burma as Chinese territory, unlike PRoC.

Your main point is good, that China still has lots of places to fill for its urbanising population than going into Russia. Although those Ghost cities aren't quite as empty as made out by certain media outlets, cough Al Jazera cough 60 minutes cough.

Just for your own interest, all the reported ghost cities aren't in Inner Mongolia. The one you're thinking of is Ordos is in Inner Mongolia. The largest one reported is Zhengzhou in Henan (which seems to be a conversion of an existing city into a megapolis). This was the subject of a 60 minutes report where they show an empty mall to demonstrate the bubble. So someone went to find this Ghost mall. He found it and more. An even bigger mall filled with shops and people close to the empty mall. Naturally the Chinese have invented some type of device to hide what they don't want Western Media to see. That's the only logical explanation. Otherwise we would be forced to conclude 60 Minutes somehow missed this ginormous mall through gross incompetence or deliberate action, and we know Western media always tell the truth.

On another note, if you pretend you are Chinese, China Bashers would start jumping up an down and say "see China wants to conquer Mongolia."