Russia has signed a deal with Pakistan to build a major gas pipeline linking the nation’s southern port of Karachi to industrial hubs in the north. The deal is set to be the biggest between Moscow and Islamabad since the 1970s.
Russia’s Energy Minister Nikolay Shulginov and the Pakistani Ambassador, Shafqat Ali Khan, signed a revised agreement on the project in Moscow on Friday, opening the way for the start of construction in the near future.
Spanning more than 1,100 kilometers, the pipeline dubbed the ‘Pakistan Stream’ is expected to have a discharge capacity of up to 12.3 billion cubic meters of natural gas per year, according to the Energy Ministry’s statement.
The pipeline would connect liquefied natural gas terminals in Karachi and another port city, Gwadar, with power plants and industrial hubs in Pakistan’s northern region of Punjab, which includes the city of Lahore.
Both nations “put a major effort” in preparing the amendments to the deal. The signing of the agreement would allow them to begin construction “as soon as possible.” The deal would “help Pakistan strengthen its energy security and increase its reliance on natural gas as an eco-friendly energy source.”
Last year, a Pakistan official told Bloomberg that the construction could start as early as June. However, officials in Russia have not confirmed this information yet. The project, which has an estimated cost of $2.25 billion according to the Pakistani media, would involve the establishment of a Special Purpose Vehicle (SPV) company operated jointly by Pakistan’s Inter State Gas Systems and several Russian firms, including the TMK – a company that is one of the world’s leading steel pipe suppliers for the oil and gas industry, doing business in Russia, the US and Canada, among other nations.
Under the agreement, Pakistan would reportedly own 74% of the stakes in the pipeline operator while Russia would have the remaining 26%. The initial agreement on the pipeline construction was signed back in 2015 but it was then reviewed.
The project is set to become the biggest infrastructure deal between Pakistan and Russia since at least the early 1970s, when the Soviet Union built the Pakistan Steel Mills industrial complex at Port Qasim, near Karachi.
“The Pakistan Stream remains a flagship project in bilateral cooperation between Russia and Pakistan and both nations give priority to this issue,” Shulginov said.
Hydrogen-mixed economy might be coming much sooner than expected. There are many factors contributing to that outcome – at least at the middle term of transition from fossil fuels to renewable energy sources.
Tehran, 1943: Joseph Stalin, Franklin D. Roosevelt and Winston Churchill. Hosted by the young Shah Reza Pahlavi. Agree on plans for the two-front attack on Hitler while sketching out the east-west division of Europe.
Holding the meeting in Iran, with separate consultations with the shah, was no mistake. Gulf oil was a critical resource to the Allied war effort. Oil has flowed under the surface of political conflicts ever since.
Fast-forward to today, and political antagonists and energy players are again forging a messy path forward. This time focused on long-term energy transitions as disparate countries try to slow and eventually stop climate change.
The 2015 Paris Agreement was a groundbreaking diplomatic effort. 196 countries committed to prevent average temperatures from rising by more than 2 C (3.6 F), with an aim of less than 1.5 C (2.7 F). To meet that goal, scientists argue that fossil fuel use will have to reach net-zero emissions by mid-century.
As the world’s population and economies grow, energy demand is expected to increase by as much as 50% over the next 30 years. Making the right long-term investments is crucial.
Different visions of the future
Energy companies and policymakers have widely different visions of that future. Their long-term scenarios show that most expect fossil fuel demand to remain steady for decades and possibly decline. However, many are also increasing their investments in cleaner technologies.
The International Energy Agency has a history of underestimating demand and clean energy. Forecasts that renewable energy will meet about one-third of the global energy demand by 2040 in its most optimistic scenario.
That would be in a world with higher carbon taxes and more wind power, solar power, electric vehicles, carbon capture and storage. Greener technologies may come close to keeping warming under 2 C, but not quite.
Exxon, on the other hand, forecasts a path dependent on a fossil fuel-based economy, with slower transitions to electric vehicles, steady demand for oil and gas, and a warmer world.
Exxon is also investing in carbon capture and storage and hydrogen. However, it believes oil and gas will provide half the global energy supply in 2040 and renewable energy will be less than one-fifth.
OPEC, whose members are among the most exposed to climate change and dependent upon oil and gas, also sees oil and gas dominating in the future. Nonetheless, several Gulf nations are also investing heavily in alternative technologies. – including nuclear, solar, wind and hydrogen.
BP proposes a more focused shift toward cleaner energy. Its “rapid scenario” forecasts flat energy demand and a more dramatic swing to renewables combined with a growing hydrogen economy. The company expects its own renewable energy to go from 2.5 gigawatts in 2019 to 50 GW by 2030. And it expect its oil production to fall by 40%.
Exploring hydrogen’s potential
Others are also exploring hydrogen’s potential. Much as with utilities’ shift from coal to natural gas, hydrogen may ease the transition to cleaner energy with enough investment.
Since this fuel is getting so much industry attention, let’s look more closely at its potential.
Hydrogen has the potential to fuel cars, buses and airplanes. It can heat buildings and serve as a base energy source to balance wind and solar power in our grids. Germany sees it as a potential substitute for hard-coal coke in making steel.
It also offers energy companies a future market using processes they know. It can be liquefied, stored, and transported through existing pipelines and LNG ships, with some modifications.
So far, however, hydrogen is not widely used as a clean-energy solution. First, it requires an upfront investment – including carbon capture capacity. It requires pipeline modifications, industrial boilers for heat rather than gas, and fuel cells for transportation. Plus policies that support the transition.
Second, for hydrogen to be “green,” the electricity grid has to have zero emissions.
Most of today’s hydrogen is made from natural gas and is known as “grey hydrogen.” It is produced using high-temperature steam to split hydrogen from carbon atoms into methane. Unless the separated carbon dioxide is stored or used, grey hydrogen results in the same amount of climate-warming CO2 as natural gas.
Gray, Blue and Green Hydrogen
“Blue hydrogen” uses the same process but captures the carbon dioxide and stores it so only around 10% of the CO2 is released into the atmosphere. “Green hydrogen” is produced using renewable electricity and electrolysis. It is twice as expensive as blue and dependent on the cost of electricity and available water.
Many electric utilities and energy companies, including Shell, BP and Saudi Aramco, are actively exploring a transition to a hydrogen-mixed economy, with a focus on blue hydrogen as an interim step.
Europe, with its dependence on imported natural gas and higher electricity costs, is setting ambitious net-zero energy targets. That will incorporate a mix of blue and green hydrogen coupled with wind, solar, nuclear and an integrated energy grid.
China, the world’s largest energy user and greenhouse gas emitter, is instead investing heavily in natural gas. Natural gas has about half the carbon dioxide emissions of coal – along with carbon capture and storage and a growing mix of solar and wind power.
Russia, the second-largest natural gas producer after the US, is expanding its gas production and exports to Asia. Some of that gas may end up as blue hydrogen.
Ramping up blue and green hydrogen as clean-energy solutions will require substantial investments and long-term modifications to energy infrastructure. In my view, it is not the magic bullet, but it may be an important step.
This story originally appeared on The Conversation website. To see the original, please clickhere.
Analysts say fuel cell electric vehicles are the leading alternatives to internal combustion engine automobiles
By ALAN KIRK
On March 22, a trio of Chinese electric vehicle (EV) companies – Nio, Xpeng, Li Auto, all New York listed – announced that they were hiring investment advisers to assist them with secondary listings in Hong Kong.
Credit Suisse and Morgan Stanley have been appointed as Nio is looking to sell a 5% stake, valued at approximately $3.5 billion. Somewhat lower but still comparable valuations for the other two would bring a total of $7.5 billion to Hong Kong.
CNBC stock market guru Jim Cramer, usually unflappable, did a double take on air, also on March 22, commenting on Ark Investment fund manager Cathie Wood’s call of $3,000 per share for Tesla,
“I don’t think there is a fund manager in this country that could get away with this kind of thing other than Cathie Wood.
“But Cathie Wood actually is so good that you start thinking, ok, what is Elon Musk going to do? Maybe he’s got a lot on his mind that she has thought about and …”
And so it went for several more minutes.
The electric vehicle space is jumping and, of course, Musk almost certainly has a lot in mind that will make it even more attractive to investors.
What he’s most likely not thinking about is the large-scale application of hydrogen for EVs. He once called fuel cells “fool cells.”
But while hydrogen fuel cells are just beginning to provide serious competition to battery powered vehicles in personal transportation, they are making a large impact in the heavier vehicle commercial transportation space where large loads have to be carried over long distances.
That’s where hydrogen has the advantage.
And that’s where China, just getting to be competitive with the likes of Tesla in snazzy passenger cars, is poised to seize the lead with hydrogen-powered trucks.
The hydrogen fuel cell is a rare example of a long-established technology turning into a game-changing disrupter. It has powered spacecraft and submarines for decades. However, it made little headway in ground transportation because governments balked at the cost of building fueling infrastructure. And also because the cost of producing the raw materials was prohibitive.
That’s changing in a big way! Mainly because China has made hydrogen-powered ground transport one of the top priorities of its $560 billion a year technology investment budget.
Europe and Japan – Germany has declared 2021 the year of hydrogen technology – are running only slightly behind China. For the next decade or so, battery-powered passenger vehicles will dominate the market for low-carbon substitutes for the internal combustion engine. But batteries can’t power long-range freight transportation by truck and rail, and China is making a decisive commitment to hydrogen.
China’s commitment to hydrogen has drawn the attention of global investors.
In a March 2021 report entitled “China’s gateway to a hydrogen future,” J.P. Morgan research analysts Han Fu and Stephen Tsui write, “Green hydrogen, a clean form of energy, clearly holds potential to play a critical role in China’s 2060 carbon neutrality ambitions.
“Fuel Cell EVs appear to be emerging as an early use case. This is an opportunity for the China hydrogen ecosystem to develop approaches to overcome technical and economic challenges, necessary for more widespread future applications. Hydrogen plays have been in market focus, and valuations are lofty.”
“The global automotive fuel cell market size was USD1.07 billion in 2020…This market exhibited a stellar growth of 44% in 2020,” according to a Fortune Business Insights study, and “is projected to grow from USD $1.73 billion in 2021 to UD $34.63 billion in 2028 at a stellar compound adjusted growth rate of 53.5% in the 2021-2028 period.”
The Fortune report adds that fuel cell electric vehicles are “the leading alternatives to the widely used internal combustion engine automobiles.” The lion’s share of the growth, will be in the Asia-Pacific region.
Already largest market
Already the largest market for Plug-in Energy Vehicles (PEV’s) with 3 million on the road. China projects a fleet of 50,000 fuel-cell vehicles (FCV’s) by 2025 and 1 million by 2030, from only 6,000 on the road in 2019.
Beijing listed hydrogen as an energy source in a public law for the first time in its 2020 Energy Law of the People’s Republic of China. It established subsidies for FCV’s through four government departments, with an emphasis on freight and urban mass transit.
China is ready to finance the refueling infrastructure required to make hydrogen-based transport economically viable. And it has a large supply of hydrogen. It is now produced as a waste byproduct by its chemical industry.
According to government directives issued in September 2020, central government subsidies for FCV’s could reach RMB 17 billion. It is depending on how quickly Chinese cities meet their targets for FCV deployment. Local governments are likely to match the central government support. Supporting between 40,000 and 60,000 new vehicles between 2020 and 2023.
China’s commitment to fuel-cell vehicles prompted a scramble by Europe and Japan to put forward their own programs.
Established Chinese automakers as entrepreneurs are launching new ventures to meet the enormous demand for FCV’s projected by the government. SAIC, a state-owned automaker, plans to produce 10,000 FCV’s a year by 2025. More ambitious is the alliance between startup Ares Motors and two established Chinese vehicle manufacturers, Fujian-based Wisdom Motors and Chery Holdings of Anhui Province.
Ares expects to produce 4,000 PEV’s and FCV’s in 2021 at Wisdom’s Fujian facility. And cross the 10,000- vehicle mark within several years.
Large international automakers are gearing up for the Chinese market. Both as OEM’s and as components manufacturers. Toyota set up a joint venture with FAW group in 2019 which will begin to deliver fuel-cell systems for trucks and buses in China in 2022.
The supply chain for FCV components, moreover, is in an early stage of development. The September government directives focused on building infrastructure (mainly refueling stations) as well as developing a robust supply chain.
This includes more efficient capture of waste hydrogen from China’s chemical industry. Also additional hydrogen production facilities, and manufacturing of fuel stacks (the hydrogen storage module for vehicles) as well as engines.
J.P. Morgan analysts explained in their March 2021 report, “With the carbon-neutrality target now in place, we are optimistic that hydrogen can replicate the success of wind/solar power. The H2 addressable market could grow >30x by 2050, to Rmb12tn, and we estimate green hydrogen’s being commercially competitive by 2030.
This expectation is backed by multiple catalysts to spawn H2 development in China, including top-down policy support, technological improvements and economies of scale.”
Hydrogen, to be sure, remains controversial.
In Europe, Volkswagen-owned Scania, one of Europe’s largest truck producers, declared last year that fuel-cell trucks will be too inefficient and costly to compete with the battery-powered alternative. Scania is betting that improvements in battery technology will allow battery-powered trucks to carry a standard 40-ton load for 4.5 hours — far more than today’s batteries can manage.
To travel several hundred miles today, an eighteen-wheeler would have to carry nothing but batteries to power the engine.
Volvo and Daimler have joined forces with Shell to make hydrogen the future commercial standard for trucking in Europe.
Dubbed “H2Accelerate,” the Shell-led program envisions a public-private partnership to create economies of scale for freight FCV’s. With a network of hydrogen fueling stations built out across Europe by the second half of the 2020s. A trade association, Hydrogen Europe, predicted that Europe would have 10,000 hydrogen trucks in operation by 2025 and 100,000 by 2030.
The United States is far behind Asia and Europe.
A former top General Motors engineer, Ian Hanna, believes in pursuing hydrogen and battery technology in tandem. A former head of GM’s systems safety operations in China, Hanna now heads Ares Motors, an ambitious OEM startup.
What distinguishes Ares is a combination of intellectual property for vehicle fuel cells and partnerships with major Chinese manufacturers that allow it to scale up vehicle production very quickly.
“We’ve got prototypes running on the road with demonstration vehicles that are to be ready by the end of the year. We are actually going after significant volume for this year in the thousands of vehicles,” Hanna told Asia Times.
“And it’s with our dual approach. We’re not only a hydrogen fuel cell company. We’re also a battery electric vehicle [BEV} company. That dual propulsion strategy allows us to meet customer needs this year.
“The 2021 volumes will primarily be through the BEV’s. The infrastructure is well established and the technologies of course are mature, so the customer’s comfortable with it. And then long-term we’ll be able to offer our customers both the hydrogen fuel cell vehicles and our BEV vehicles. Only depending upon whatever is the best fit for their use.”
Choice of electric battery power or hydrogen fuel cells
Ares’ flagship product is a heavy truck with a choice of electric battery power or hydrogen fuel cells. The hydrogen model offers a 1,000-kilometer cruising range with a standard 43-ton load. Compared with 400 kilometers for the battery-electric vehicle version.
“For a lot of the longer-range customers,” Hanna added, “the BEV truck may not make sense. So we’ll be able to offer them both of those solutions. I think our timing will be right. We will have the customer relationships, as well as the technology to differentiate our company.
“We have our own proprietary fuel cell engines and other technology that we can build and integrate into our trucks. By contrast, competitors are doing that through non-binding partnerships. We’ve developed a lot of that technology, and our partners are part of the Ares family. A lot of our technology comes from established OEMs.
“There’s no reason for Ares to go and reinvent an electronic power system. We have great partners that already know how to do that really well right now. We will be able to hit the ground with significant volume in a very short time.”
A key partnership is with Sunrise Power, China’s premier manufacturer of fuel cells, with whom Ares has a joint-venture laboratory. Ares is working with Sunrise and other partners to build hydrogen refueling stations in Europe and North America as well as China.
According to a company release, “The new Ares energy stations will ensure the infrastructure is in place to support both our BEV and FCEV vehicles. The energy station will include facilities for charging BEV vehicles, Hydrogen fueling pumps, traditional gas and diesel pumps, and battery swap capability.”
Strong government support and a robust supply chain
The combination of strong government support and a robust supply chain for FCV technology as well as hydrogen fuel makes it possible for a startup like Ares to scale up production rapidly.
“Asia Pacific is projected to hold a major market share due to the encouraging FCEV deployment targets of governments. Coupled with increasing investments in hydrogen fueling infrastructure. Additionally, high fuel stacks manufacturing capacities in the region, owing to the presence of large-scale FC passenger car manufacturers, will also add to the regional landscape.
Ares Motor, a Canadian company with principal operations in China, is seeking a Nasdaq listing in the course of the first half of this year. It also builds city and highway buses, as well as logistic vehicles and autonomous tractors for use in port and dock areas.
Perhaps Ares’ most important advantage is to be located in China. Cost efficiency is the key to the future of hydrogen-powered transport. And the cost of hydrogen itself is the most important variable.
China now produces a third of the world’s hydrogen
China now produces a third of the world’s hydrogen. 20 million metric tons a year. Enough to cover a tenth of the country’s total energy needs. At an estimated fuel consumption of 7.5 kilograms of hydrogen for every 100 miles of road haulage, according to Fuelcelslworks.com, China’s present output potentially could power a truck fleet over 267 billion miles a year of transport. More than enough to meet the country’s present annual 6 billion ton-miles of road transportation.
The cost of hydrogen production is falling. From $6 per kilogram in 2015 to $2 per kilogram in 2025.
China led the world in deployment of cost-efficient solar energy. Many analysts expect China to do the same with hydrogen. A study by Chinese scientists argues that a $2/kg hydrogen price can be achieved quickly through electrolysis of water. It produces the purest hydrogen with the lowest overall environmental impact.
Freight and bus transportation with FCVs becomes economically viable at a hydrogen price of $3/kg. Passenger car FCVs become viable at $2/kg.
Apart from China’s comparatively low production costs for hydrogen, a shift to this fuel source contributes to China’s energy security. As of the first half of 2020 China imported 73% of its oil consumption. Substituting home-produced hydrogen for imported oil is a national security measure as well as an economic and environmental consideration.
So you don’t like CO2? What you need to know, then, is that there’s no alternative to advanced nuclear power.
Concern about the climate effects of man-caused CO2 emissions has prompted gigantic investments into so-called renewable energy sources: wind, solar, hydropower and biofuels. Meanwhile, in a huge mistake, nuclear energy – a reliable CO2-free power source producing 14% of the world’s electricity – has been left far behind.
Germany provides a bizarre example, albeit not the only one. Here the government’s commitment to its so-called climate goals has been combined, paradoxically, with the decision to shut down the country’s remaining nuclear power plants by 2022.
Would it not be more rational, if we believe that human emissions of CO2 are destroying the planet, to expand nuclear energy as quickly as possible, rather than shut it down?
Last December the influential German magazine Der Spiegel ran a story with the title, “Can New Reactor Concepts Save Us from the Climate Collapse?” The article reports on how numbers of international investors and firms, including Bill Gates and his TerraPower, are engaged in a race to develop advanced nuclear reactor technologies as the key to eliminating world dependence on fossil fuels. A goal that could never be attained by the so-called renewable sources alone.
What should we fear most?
Addressing readers who remain terrified of nuclear energy, Spiegel writes: “According to estimates, 800 000 people die every year from the smoke produced by coal, containing toxic substances such as sulfur dioxide, nitrogen oxides, mercury or arsenic. But concepts must also be demonstrated for how to dispose of the toxic substances contained in used-up photovoltaic cells.”
The magazine explains that “energy generation nearly always claims victims and creates some pollutants. The question is, what costs and risks are we ready to accept? What should we fear most? Global warming, which is sure to come, or a possible regional reactor catastrophe? The objections to nuclear energy are justified. But in view of climate change, is it right to reject nuclear technology altogether?”
New reactor designs such as the traveling wave reactor, the molten salt reactor and small modular reactors promise to be much safer and cheaper than conventional nuclear power. And to have broader ranges of applications. Some could even “burn” nuclear waste as a fuel. Therefore eliminating the need for very long-term storage of radioactive material, which is a major argument against nuclear energy. Standardized modular construction would allow nuclear reactors to be factory-produced in much shorter times.
On this basis, a massive expansion of nuclear power worldwide might be accomplished within the space of 10-15 years. The rapid build-up of nuclear power in France, in response to the 1973 “oil shock,” provides a certain historical precedent.
There is no doubt that nuclear energy is back on the world agenda. Even for many of those who have been bitterly opposed to it in the past. And nuclear energy – in the form used today – still has serious problems. But new reactor concepts are on the table. That addresses those issues and could completely redefine the role of nuclear energy in the world economy.
I shall describe some of these reactor concepts in a bit of detail. But first I should try to establish clarity on a crucial point.
I believe we are facing a branching point in global energy policy. What should be the priority? Assuming it should be a goal to drastically reduce world emissions of CO2 in the medium and long term – which I don’t want to argue about here – is it wise to invest so much in renewable energy sources, as many nations are doing today? Or should we allot only a limited role to the renewables? And go for a massive expansion of nuclear energy instead?
This week Rostekhnadzor issued a license to build the world’s first experimental demonstration power unit with a lead-cooled BREST-OD-300 fast neutron reactor. The project is being implemented at the site of the Siberian Chemical Combine of Rosatom near Tomsk
This material was prepared with the support of Postnews.
What does it mean? This means that the creation of the most modern, efficient and safe nuclear reactor in the world has officially begun in Russia . It’s just so pretentious? In this case, it is not a cliché. Let’s explain and start from afar. That is why nuclear energy has not yet conquered absolutely the whole world? After all, the problem of emissions from hydrocarbon power plants is now so acute. It would seem that nothing better than nuclear power could be invented. There are two reasons.
First: depleted uranium
Accumulated during uranium enrichment for reactor fuel and already spent fuel . What to do with them? In fact, the problem of their storage is not so terrible, because there are not so many of them and they are not so radioactive, and the methods are quite reliable. But still.
The second reason: fear of a repeat of Chernobyl.
The first problem with “waste” is solved with the help of fast reactors. In such, recycled fuel elements of conventional nuclear power plants are used as fuel elements. And in the process, they also enrich depleted uranium. Bingo! How? Here is brief explanation:
“Conventional” thermal (much less fast) neutron reactors use enriched radioactive uranium-235. Fast reactors can use both thorium-232 and weapons-grade plutonium, which in conventional reactors cannot participate in a controlled reaction. This solves the problem of spent nuclear fuel and weapons-grade plutonium stockpiles. But how is the problem of depleted uranium-238 solved?
It is placed in the reactor core. Neutrons are fast, so they have enough energy to turn depleted uranium into plutonium. Which can be used right there (well, not quite right there, but after processing into special assemblies) as fuel.
Experiments with such reactors were carried out at the dawn of nuclear power, but then there was simply not enough technology and materials to create such complex systems. It is a little paradoxical that neutrons are initially fast during the reaction. In the classical scheme, they have to be slowed down with the help of fuel compaction and special moderators and reflectors. But now in Russia there are such technologies, materials and specialists to cope with fast particles.
Solving problem with nuclear waste
There are now only two such commercial reactors in the world, both in Russia. Therefore, sometimes you can see panic news that “nuclear waste” is being brought from Europe to Russia . This is not waste, but raw material for the fuel of our nuclear power plants. And we are also paid extra for this. Moreover, in fast neutron reactors most of the radioactive superheavy elements are “burned out”, which in a conventional reactor go to waste. Combustion is not a very good term. Because smoke and soot remain from the fire, but not here. They, these elements, are simply not available at the output.
The second reason, security, is also being addressed. A second Chernobyl will not happen at the current level of technology. A lot of special and active and passive (like several thick reinforced concrete sealed capsules) have been invented since then.
But it is possible to make a peaceful atom even safer. In the abbreviation BREST, “BR” stands for “fast reactor”, and “EST” stands for “natural safety .
In ordinary fast reactors, sometimes mercury is used as a coolant, but more often it is liquid sodium (and in “ordinary”, thermal reactors , it is most often water). It boils at 883.15 ° C. And upon contact with air, it actively reacts chemically. So an explosion is purely potential.
In BREST, liquid lead is used. It does not react with air, it boils well over a thousand degrees, and in the event of a depressurization (and so unlikely) it will simply solidify and cool the reactor core by itself.
So in Russia two futures began at once : the future of a closed nuclear cycle and the future of naturally safe reactors.
Russia’s geographical position makes its exports of liquefied natural gas (LNG) more profitable and competitive with American and Australian supplies, according to Russia’s Energy Minister Alexander Novak.
Russia ships most of its LNG (around 69 percent) to Asian markets, where the bulk of global LNG supplies are sent. The country could also export its LNG via traditional Russian pipeline gas European routes, due to low cost and short transportation distance, the minister wrote, in an article for the Energy Policy journal.
“Russia’s convenient geographical position between Europe and Asia allows our LNG to be profitable at current prices and to win competition from the US and Australia,” Novak said. “If necessary, we can deliver liquefied gas to any European country, and it will be faster and cheaper than many other suppliers.”
The Northern Sea Route (NSR) could be a key transport link to connect massive Arctic energy projects Russia is currently developing with target markets. The route, which lies in Arctic waters and within Russia’s Exclusive Economic Zone, could cut the transportation time by a third, compared to shipments via the Suez Canal.
Russia is one of the world’s leading exporters of natural gas. Last year, it produced more than 40 billion cubic meters of LNG – a nearly 50 percent increase from 27 billion cubic meters it had in 2018. By 2035, Novak expects the country to boost production to 120 million tons, amounting to around a fifth of the forecasted global LNG production.
Trump urges Europe to buy American natural gas to ensure their energy security
European countries should rely on US gas imports to ensure their energy security, US President Donald Trump announced at the World Economic Forum in Davos.
“With an abundance of American natural gas now available European allies no longer have to be vulnerable to unfriendly energy suppliers,” Trump told the audience as he boasted that the US had outpaced other countries “by far” in oil and gas production.
We urge our friends in Europe to use America’s vast supply and achieve true energy security.
The statement falls in line with US efforts to boost its energy shipments to Europe, especially imports of liquefied natural gas (LNG). Meanwhile, many European nations have already stressed that they want to diversify their sources of energy, and the Nord Stream 2 gas pipeline from Russia could be one of the ways to achieve this.
However, Washington has recently issued an ultimatum to European companies involved in the Russia-led project, threatening to impose harsh sanctions on them unless they ditch it. Fearing the restrictions, the Swiss-Dutch company Allseas stopped all work on the final stages of the project and withdrew its vessels from the construction area in the Baltic Sea in December.
The US approach has already been criticized in Europe, with German Chancellor Angela Merkel saying that “sanctions are the wrong way to go.” As she met Russian President Vladimir Putin, she also stressed that Nord Stream 2 is set be finished against all odds by the end of 2020 or early 2021.
India could become first non‑Arctic state to develop Russia’s Arctic resources
New Delhi is considering participating in Russian oil and liquefied natural gas (LNG) projects in the Arctic as cooperation with Moscow could open vast opportunities for India in the resource-rich region.
“We are establishing cooperation in geological exploration, joint development of oil and gas fields on the territories of the two countries, including offshore projects, which will eventually allow India to become the first non‑Arctic state to extract resources in the Arctic,” Russian Foreign Minister Sergey Lavrov said in an interview with the Times of India
India, one of the largest and fastest growing LNG markets, wants to get Russian LNG from the Arctic to satisfy its growing energy demand. It could join the Arctic LNG project led by Russian energy giant Novatek, according to India’s Minister for Petroleum and Natural Gas Dharmendra Pradhan.
“We are also studying the opportunities to participate in the future Novatek project in the Arctic. We are looking into all the opportunities to get LNG from this region,” the minister told reporters on Wednesday.The interest in Russian gas supplies comes as India turns away from joint projects with neighboring Pakistan. New Delhi has refused to sign a memorandum of understanding on the Iran-Pakistan-India gas pipeline construction amid escalating tensions with Islamabad.
“We don’t want to deal with Pakistan. We are more interested in Russian LNG,” Pradhan said.
In September, Russia’s Novatek and India’s H-Energy Global signed an agreement on LNG supplies to India on a long-term basis. The memorandum of understanding envisages joint investment in future LNG terminals of the two companies, as well as establishing a joint venture to sell LNG and natural gas to customers in India, Bangladesh and other countries.
Crude reserves in Russia’s Arctic are also attracting Indian companies willing to invest into the massive Vostok oil project. According to Pradhan, the project is “very interesting” for the country, but he did not elaborate on how much it is going to invest. Vostok Oil is a joint venture between state-owned oil major Rosneft and private oil producer Neftegazholding (NGH) with the projected production of up to 100 million tons.
As the US/Turkish relationship deteriorates it is having spillover effects around the region. Turkish President Recep Tayyip Erdogan’s continued defiance of US’s demands have placed Turkey in the cross-hairs of a vicious hybrid-war attack on the country’s fragile economic foundation.
So, I find it very interesting that during the week of the greatest turmoil in Turkish markets, notably a panic in the Turkish Lira, the five nations bordering the Caspian Sea reach an historic agreement which remained elusive for over 20 years.
And at the heart of that disagreement has been Azerbaijan’s claims over oil and gas rights in the Caspian which rankled both Turkmenistan to the north and Iran to the south.
For the past few years, as US/Russian relations have cratered, Russian/Azeri relations have improved. And it has been the diligent work of both Russian President Vladimir Putin and his Foreign Minister Sergei Lavrov which laid the groundwork for this agreement.
Putin first organized a trilateral summit between himself, Azeri President Aliyev and Iranian President Rouhani two years ago this month.
But, more importantly, it has been Putin and Lavrov’s steady and consistent diplomatic efforts to improve relations between Russia and all the former Soviet states which the US has worked diligently since the early 1990’s to harm.
Azerbaijan has always fallen on the US side of the geopolitical chess board.
On top of this is Russia’s very successful campaign in countering the US/Saudi/Israeli-led civil war in Syria which resulted in a very significant turn in Russian/Turkish relations. And this, to me, is the key to understanding why these long-frozen conflicts around the region are changing, sometimes, like this weekend’s summit, dramatically.
To this point Russia has taken everything the US has thrown at it and survived. And if you don’t think smaller players like Azerbaijan aren’t taking notice, then you are hopelessly naïve. A Russia capable of standing up to the US is a Russia capable of being a valuable regional partner.
And that partnership extends around the entire region.
Take the frozen conflict of Nagorno-Karabakh, for example. For the past twenty-plus years Turkey has backed Azeri claims and Russia, tacitly, Armenia’s. But, despite a flare-up a couple of years ago, just hours after US Secretary of State John Kerry left Baku, settling Nagorno-Karabakh is on everyone’s mind.
Over the weekend Nagorno-Karabakh was on the diplomatic menu in the meeting between Lavrov and his Turkish counterpart, Movlut Çavuşoğlu.
Even the new Armenian Prime Minister, Nikol Pashinyan, is ready to discuss the conflict.
“We have expressed political willingness to continue talks on Nagorno-Karabakh in a constructive way, in line with our political obligations and in the context of Armenia’s interests. However, a preparatory stage is required to revive negotiations, especially in the current political situation,” he stressed.
Pashinyan added that Yerevan “is ready for any scenario on Nagorno-Karabakh.”
I expect that a deal over Nagorno-Karabakh will be brokered by Russia with Turkey’s support now that Turkey will be dependent on Russia for its financial survival as it pursues a painful and necessary de-dollarization process, the beginnings of which have already begun.
With reports that the US is in peace talks with moderate factions within the Taliban out there, the possibility of a withdrawal becomes greater. Moreover, the Caspian Sea agreement precludes any third-party military presence, another sign of Azerbaijan’s shift away from the US’s orbit.
The regional change doesn’t stop there, however. The recent election of Imran Khan in Pakistan changes that country’s role again in the direction of Russian and Chinese integration plans, especially in brokering a long-term stabilization plan for Afghanistan.
The message is becoming very clear to all the smaller regional players, the board is changing. And you can be a part of it or you can be left behind. The US’s plans for permanent chaos in central Asia has harmed all of these places and now is the beginning of the transition period.
I’ve held from the moment it began that Russia’s intervention in Syria would mark the peak of the US’s ability to project power around the world, this is certainly now true in central Asia and the Middle East.
The current defiance by Turkey is another aftershock of that intervention which revealed the lies which everyone on the ground in Syria knew about but felt powerless to change.
That’s why Russia’s intervention and success was so significant. It created an Axis of Resistance that was credible and would pay the kinds of dividends we are seeing today.
This is not to downgrade the contributions of Russia’s partners in Syria, the Syrians themselves, Iran and Hezbollah, but it was Russia that tipped the balance of power in Syria. Because under no circumstances were the Obama or Trump administrations willing to risk a direct conflict with Russia over Syria.
Hillary Clinton was a different story, but, thankfully, one we never had to experience.
So, for Azerbaijan its relationships with its neighbors are about to undergo a sea change, which should see meat put on the bones of this weekend’s agreement about oil and gas rights.
The Southern Gas Corridor is one of those ridiculously expensive work-arounds created by US geopolitical meddling to free Europe from the yoke of Russia’s cheap and abundant gas supplies.
Royal Dutch Shell and France’s Total were not given such waivers over the former’s involvement with Nordstream 2 or the latter’s deal with NIOC, which China’s CNPC took over at a discount.
As I’ve said before, never go nuclear in your negotiations, if your bluff is called you are left standing naked as the tide recedes. And the US’s real strength in central Asia has been for many years a weak and disjointed Russia allowing the chaos sowed to flourish.
That condition is no longer in effect and all that’s left for the US is unsustainable military deployments, both financially and logistically, and growing discontent at an international system of trade and finance which is abusive.
Viewed in that context, this weekend’s surprise agreement shouldn’t be much surprise at all.