Connect with us

News

RussiaFeed

Economy

China disillusioned with Central Asian gas; switches to Russian gas

Alexander Mercouris

Published

on

0 Views

As the giant Power of Siberia pipeline intended to transport natural gas from Yakutia and the Irkutsk areas of Russia to China approaches completion, with Gazprom saying that it is now two-thirds complete, the semi-official Chinese newspaper Global Times has published an article complaining about irregularities in the supply of gas from China’s traditional Central Asian gas suppliers, Turkmenistan and Uzbekistan.

The sharp drop of liquefied natural gas (LNG) shipments through a key Central Asian pipeline network has put the already-tight domestic LNG supply situation to the test.

There are two reasons for the plunging shipments: first, LNG demand increased in the supplier countries themselves; second, the suppliers were withholding LNG in hopes of getting better prices in other markets. Those factors prompted the suppliers to break the terms of their contracts with China.

According to a statement by China National Petroleum Corp (CNPC) issued on January 31, the nation’s LNG supply situation has been deteriorating. The volume of LNG received through central Asian pipeline networks has fallen by nearly half, domestic news portal jiemian.com reported. The sudden cuts by two Central Asian countries, Turkmenistan and Uzbekistan, added a new risk to the Chinese energy supply network. China needs to re-evaluate the security of its energy supply network in Central Asia.

According to insiders at China’s three major State-owned oil companies, the Central Asian countries failed to provide China with the contracted volumes of LNG with the excuse that they didn’t have enough money to repair broken LNG equipment. A notice issued by CNPC stated that Central Asian countries owe China an average LNG volume of 30 million cubic meters per day, according to jiemian.com

Sources also said that China National United Oil Corp is negotiating with these LNG suppliers. But it seems that Chinese oil companies have no bargaining chip if the suppliers don’t keep their end of the deal. Instead of China, the suppliers can potentially send LNG to Europe at a higher price.

The cut in LNG supplies has added a new risk factor to China’s energy security, with domestic LNG inventories at record lows. Data from the Beijing oil & gas transportation center showed that the domestic natural gas pipeline network had “emergency” storage of 1.99 billion cubic meters at the end of January. According to jiemian.com, as of January 30, the volume available for sale in the current pipeline network was 420 million cubic meters per day whereas demand was 445 million cubic meters per day, in addition to the network’s own use of 5 million cubic meters per day. So the domestic supply gas is about 30 million cubic meters per day.

As a result, CNPC must ration the supply and sale of LNG to avoid a total collapse of the LNG pipeline system.

The China-Central Asia LNG pipeline, which starts at the border between Turkmenistan and Uzbekistan on the banks of the Amu Darya River, is one of the world’s longest LNG pipeline. The gas pipeline runs about 10,000 kilometers, with 188 kilometers in Turkmenistan, 530 kilometers in Uzbekistan, 1,300 kilometers in Kazakhstan and 8,000 kilometers in China.

Turkmenistan is the largest pipeline LNG exporter to China. But since January, the gas concern there has shut down supply three times.

If all these figures are true, the risk is obvious: Central Asia has emerged as a broken link in the international energy security network that China has made such effort to forge.

With China participating in globalization as the “world’s factory,” ensuring energy security is vital for China. China has put huge resources (in banking, diplomacy, investment, markets and public finance) and effort into building a five-channel international energy supply network to satisfy the world’s largest oil and gas demand.

As China adjusts its energy consumption structure, switching to green energy, the demand for LNG will constantly grow and create a heavy dependency on foreign resources. The high dependency on LNG from Turkmenistan has become a potential security risk.

If this situation continues, it will not only lead to unexpected problems for State-owned petroleum corporations, it will also leave the Chinese government unprepared. If the key passage of LNG is not stable, the security of China’s international energy supply network must be re-evaluated.

Russia and the Power of Siberia pipeline are conspicuously never mentioned in this article.  Nonetheless Chinese anger and concern about the breaches of contract by their traditional Central Asian gas suppliers is clear enough, as is the urgently expressed need for China to diversify away from them to a more reliable supplier, which can only be Russia.

The article in fact highlights the key role of natural gas in China’s future energy mix.

A visit to Shanghai in August impressed on me the extent to which the disastrous state of air pollution has become a major political and social issue in China, with China having a pressing need to move towards a ‘greener’ energy mix and to move away from its present over-reliance on coal.

As the article in Global Times shows, natural gas plays a critical role in all this, even as China forges ahead with alternative energy technologies, and a stable and reliable supply of gas to the Chinese energy market is regarded by China as essential for its energy security.

It turns out that the Chinese are finding that the Central Asian states upon which they have up to now relied for their gas are unable to maintain their gas pipeline infrastructure – much of which was built by the USSR – and are not above abusing their monopoly positions in China’s gas market to extort from China a higher price for their gas, even if this involves breaking their contracts with China.

This contrasts with Gazprom, which has a well-earned reputation for being an exceptionally reliable supplier, invariably honouring its gas supply contracts, and having all the technical and logistical resources needed to maintain its gas pipeline and gas transportation infrastructure and network in good working order.

The logic of substituting Gazprom and Russia for the Central Asian states as China’s main source of natural gas is obvious, and the Global Times article both highlights it and hints at it.

The Global Times article highlights a key point about Russian-Chinese economy cooperation.

Though trade between the countries does not approach the volumes of trade between China and the US or the EU, it is rising rapidly, with the two countries having resources which compliment each other.

Moreover Russia looks to be becoming an increasingly important source for China’s energy and raw material imports, as China discovers the difficulty of importing them reliably from elsewhere, and must also worry about US threats to blockade China’s main sea route, the South China Sea.

Russia has already replaced Saudi Arabia as China’s main source of oil.  It looks increasingly positioned to replace the Central Asian states as China’s main source of natural gas as well.

The economic linkages between the two countries are growing bigger and stronger, with their importance to each country starting to transcend their physical volume, as each comes to rely more on the other for the critical imports each needs.

Continue Reading
Advertisement
Comments

Latest

Putin, Trump meet in Helsinki for first bilateral summit

The Helsinki summit is the first ever full-fledged meeting between Vladimir Putin and Donald Trump. Their previous encounters were brief talks on the sidelines of the G20 and APEC summits in 2017.

Vladimir Rodzianko

Published

on

Russian President Vladimir Putin and US President Donald Trump are meeting in the Finnish capital of Helsinki for their first bilateral one-on-one meeting.

Trump arrived in the Finland capital a day early, while the jet of Putin, who wrapped up his nation’s hosting of the World Cup Sunday, touched down around 1 p.m. local time and the Russian president’s motorcade whisked him straight to the palace where the two world leaders are meeting.

Trump signed an August 2017 law imposing additional sanctions on Russia. The law bars Trump from easing many sanctions without Congress’ approval, but he can offer some relief without a nod from Congress.

Almost 700 Russian people and companies are under U.S. sanctions. Individuals face limits on their travel and freezes on at least some of their assets, while some top Russian state banks and companies, including oil and gas giants, are effectively barred from getting financing through U.S. banks and markets.

The agenda of the summit hasn’t been officially announced yet, though, the presidents are expected to discuss global crises, such as the Syrian conflict and Ukraine, as well as bilateral relations.

Stay tuned for updates…

Continue Reading

Latest

Peter Strzok testifies, reveals partisan warfare (VIDEO)

Partisan bickering main event as FBI Agent Peter Strzok is used as the pawn to prove legitimacy of RussiaGate investigation

Seraphim Hanisch

Published

on

Peter Strzok appeared before the House Judiciary Committee to testify about his part in regards to the improper handling of the Hillary Clinton e-mail investigation and Robert Mueller’s RussiaGate investigation. The hearing was so contentious and partisan that it stalled at this point for quite a while.

Support The Duran – Browse our Shop >>

The Republicans went one way with this, and the Democrats went the other. All the while, Agent Strzok sat there as all this happened. Representative Bob Goodlatte was furious with the situation, as one can see.

Vox News reported on this as well, calling the event a “ridiculous circus.” 

FBI agent Peter Strzok’s testimony before Congress on Thursday collapsed into a full-on partisan circus, with Republican and Democratic members shouting at each other, House Judiciary Chair Bob Goodlatte threatening to hold Strzok in contempt, and Democrats staging an over-the-top political stunt…

During the 2016 presidential campaign, Strzok exchanged a series of text messages with Lisa Page, an FBI lawyer with whom he was having an affair, that were critical of Trump. In one particularly controversial exchange, Page texted Strzok that she was worried Trump might win. “No. No, he won’t. We’ll stop it,” Strzok reassured her.

Trump and many of his Republican allies have seized on these text messages as proof of anti-Trump bias in the FBI and to discredit the Mueller probe — the investigation Trump calls a “Rigged Witch Hunt.”

His appearance before a joint session of the House Judiciary and House Oversight Committees on Thursday was the first time he had publicly testified before Congress since the revelations about his texts.

It was bound to be a contentious hearing — and so far, it has been.

Democratic Rep. Elijah Cummings (MD), the ranking member of the House Oversight Committee, immediately accused Reps. Goodlatte and Trey Gowdy (R-SC), the chair of the House Oversight Committee, of deliberately trying to interfere with the special counsel investigation after Mueller obtained five guilty pleas from people associated with the Trump campaign in recent months.

And Cummings brought along some pretty spectacular signs to make the point.

As he spoke, Democratic staffers held huge signs with the names and photos of the five people affiliated with the Trump campaign who have already pleaded guilty in the Mueller probe: former National Security Adviser Michael Flynn, former Trump campaign aide Rick Gates, former Trump campaign foreign policy adviser George Papadopoulos, London lawyer Alexander van der Zwaan, and Richard Pinedo, a California man who committed identity theft as part of the Russian election interference campaign.

Republicans first objected to the sign-holding, but seemed to back off when Democrats asked them to cite which rules the signs violated. The signs stayed up as Cummings listed what Flynn et al had pleaded guilty to and slammed Republicans for interfering with the advancement of the Trump-Russia probe.

As the hearing continued, lawmakers fought over what kinds of questions Strzok should be obligated to answer.

Gowdy’s very first question for Strzok — about how many witnesses he had interviewed in the opening days of Russia probesparked a huge debate. Strzok responded that he was not permitted to answer the question based on instructions from the FBI. Then Goodlatte threatened to hold Strzok in contempt for not answering the question.

“Mr. Strzok, you are under subpoena and are required to answer the question,” Goodlatte said.

Democratic lawmakers interrupted Goodlatte and objected loudly in defense of Strzok.

“This demand puts Mr. Strzok in an impossible position,” Jerry Nadler, the top Democrat on the House Judiciary Committee, responded. “If we have a problem with this policy we should take it up with the FBI, not badger Mr. Strzok.”

Strzok then asked to speak to the FBI general counsel before answering the question.

When Goodlatte responded that Strzok could only consult “with your own counsel,” that set off another testy exchange. Per CNN:

At one point, Strzok suggested that his removal from the special counsel’s Russia investigation was driven by optics. “It is not my understanding that he kicked me off because of any bias … it was done based on the appearance,” Strzok said, adding that he “didn’t appreciate” the way Gowdy was framing the issue.

Gowdy replied, “I don’t give a damn what you appreciate, Agent Strzok.”

“I don’t appreciate having an FBI agent with an unprecedented level of animus working on two major investigations during 2016,” Gowdy added.

The stakes are high here, which may explain the tense nature of the hearing. If Strzok’s defense of his past actions is received well by the public, he could potentially deal a serious blow to the power of right-wing narratives about FBI corruption.

But if he comes off looking bad it will do damage to the credibility of the Mueller probe — and Mueller’s ability to investigate the full extent of Trumpworld’s relationship with Russia.

Continue Reading

Latest

COLLUSION: Peter Strzok reveals THREE different versions of the ‘Trump Dossier’

FBI Special agent caught hiding fact of multiple versions of dossier during questioning by House Judiciary Committee

Seraphim Hanisch

Published

on

The salacious “Trump Dossier” that was spread as an amazing example of “fake news” being treated as real, received a further blow to its own credibility by none other than FBI Special Agent Peter Strzok on Thursday in the House Judiciary Committee hearing. Fox News notes that Mr. Strzok indicated that there was not one dossier, but three variations of this document – one held by Senator John McCain, a second by Mother Jones writer David Corn, and Fusion GPS owner Glenn Simpson.

Fox goes on to say:

Rudy Giuliani on Thursday slammed the “totally phony” Russia probe after anti-Trump FBI agent Peter Strzok refused to identify the individuals who apparently handed the bureau three different copies of the salacious Trump dossier.

“Isn’t that called collusion or conspiracy to gin up a totally inappropriate, totally illegally wire based on national security? And doesn’t it taint the entire Russian probe?” Giuliani told Fox News’ Laura Ingraham on “The Ingraham Angle.”

“That’s a disgrace, [Special Counsel Robert] Mueller should be ashamed of himself. Those Democrats trying to protect that liar, Strzok, should be ashamed of themselves. And every FBI agent I know wants to see this guy drummed out of the bureau,” he said.

Giuliani said the dossier led to fake news and the “national intelligence wiretap” of the Trump campaign officials.

“So how much of it is infecting the investigation today? We may never know, which is why I think the investigation is totally phony,” he added.

The inquiry into the dossier occurred during a fiery exchange earlier between Rep. Jim Jordan, R-Ohio, and Strzok, who appeared before a joint House committee about his role in the investigation into Russian interference in the 2016 presidential election.

Jordan pressed Strzok about an email he sent to his colleagues, including FBI lawyer Lisa Page with whom he had an extramarital affair, indicating that he has seen different versions of the infamous Trump dossier from three different sources.

Jordan said he had the email the he sent to Page and several others with the subject: “BuzzFeed is about to accomplish the dossier.”

“It says this, ‘Comparing now the set is only identical to what (Sen. John) McCain had, parentheses, it has differences from what was given to us by (Mother Jones’ David) Corn and (Fusion GPS founder Glenn) Simpson.’ Did you write all that?” Jordan asked.

Strzok refused to answer and declined to confirm whether there were three copies of the dossier the FBI had its hands on, saying he can’t answer under the directive of the bureau.

Continue Reading

JOIN OUR YOUTUBE CHANNEL

Advertisement

Your donations make all the difference. Together we can expose fake news lies and deliver truth.

Amount to donate in USD$:

5 100

Waiting for PayPal...
Validating payment information...
Waiting for PayPal...
Advertisement
Advertisements
Advertisement
Advertisements

Quick Donate

The Duran
EURO
DONATE
Donate a quick 10 spot!

The Duran Newsletter

Trending