• 3 minutes Shale Oil Fiasco
  • 7 minutes "Leaked" request by some Democrats that they were asking Nancy to coordinate censure instead of impeachment.
  • 12 minutes Trump's China Strategy: Death By a Thousand Paper Cuts
  • 16 minutes Global Debt Worries. How Will This End?
  • 5 mins americavchina.com (otherwise known as OilPrice).
  • 6 hours Democrats through impeachment process helped Trump go out of China deal conundrum. Now Trump can safely postpone deal till after November 2020 elections
  • 16 hours Forget The Hype, Aramco Shares May be Valued At Zero Next Year
  • 1 day Natural Gas
  • 9 hours Iraq war and Possible Lies
  • 9 hours POTUS Trump signs the HK Bill
  • 21 hours Joe Biden, his son Hunter Biden, Ukraine Oil & Gas exploration company Burisma, and 2020 U.S. election shenanigans
  • 12 hours READ: New Record Conoco Eagleford Vintage 5 wells, their 5th generation test wells . . . Shale going bust . . . LAUGHABLE
  • 2 days 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 2 days Wallstreet's "acid test" for Democrat Presidential candidate to receive their financial backing . . . Support "Carried Interest" . . Leave it alone
  • 2 days Winter Storms Hitting Continental US
  • 1 day Aramco Raises $25.6B in World's Biggest IPO
  • 1 hour Everything you think you know about economics is WRONG!
  • 1 day My interview on PDVSA Petrocaribe and corruption

Breaking News:

Surprise Crude Build Threatens Oil Rally

Alt Text

Aramco Looks To Build An LNG Fleet

Aramco’s shipping division has expressed…

Alt Text

Natural Gas Set To Fall Even Further

Natural gas prices are likely…

Alt Text

The Natural Gas Nation Every Exporter Is Targeting

Germany is already the world’s…

Tim Daiss

Tim Daiss

I'm an oil markets analyst, journalist and author that has been working out of the Asia-Pacific region for 12 years. I’ve covered oil, energy markets…

More Info

Premium Content

Russia, U.S. Compete For Asian LNG Market Share

For several years, at least since Donald Trump became president more than two years ago, the U.S. has insisted that American sourced liquefied natural gas (LNG) is the answer for Europe’s gas diversification needs, particularly a long-needed pivot away from geopolitically charged Russian pipeline gas.

Moreover, U.S. claims that its LNG is the answer for European gas and energy security needs have caused rifts in EU-US relations, particularly relations between longtime allies Washington and Berlin.  In a televised meeting with reporters and NATO Secretary-General Jens Stoltenberg before a NATO summit in Brussels last year, Trump said, referring to the controversial Nordstream 2 gas pipeline project, that it was “very inappropriate” that the U.S. was paying for European defense against Russia while Germany, the biggest European economy, was supporting gas deals with Moscow.

Since that time Berlin has been the first to blink as it promised to develop more LNG infrastructure and procure not only more U.S. but Qatari and other producers’ gas. However, the country is still pushing through with the Nordstream 2 project. The Russian-led $11 billion gas pipeline will stretch some 759 miles (1,222 km), running on the bed of the Baltic Sea from Russian gas fields to Germany, bypassing existing land routes over Ukraine, Poland and Belarus. It would double the existing Nordstream pipeline’s current annual capacity of 55 bcm and is expected to become operational by the end of next year.

New headwinds for U.S. LNG ambitions

Now, the U.S. energy patch may have another hurdle to overcome, which also intersects the largest LNG market in the world - the Asia Pacific region which accounts for 72 percent of global LNG demand. On Wednesday at an LNG conference in Moscow, Shell's Senior Deal Lead Stuart Bradford said Russian LNG is well positioned to compete with North American projects to reach new markets in Asia and the Atlantic Basin despite challenges. He added that Russian LNG can offer several location options - the planned capacity expansion at the Sakhalin plant, the Arctic with Yamal LNG and Arctic LNG 2 projects led by Russian Novatek, and the Baltic coast, with the Baltic LNG project. Related: U.S., Canadian Rig Count Plunges As Oil Retreats

However, he also said that North American projects benefit from lower capital expenditures, from so-called “special relationships” as well as being supported by lower tax regimes, than their Russian project counterparts. Bradford added that the commercial arrangements in North America are implemented on "basis risks," with gas prices based on the well-established Henry Hub, adding that competition is healthy. "Shell is convinced that Russia LNG can commit to these challenges."  However, Bradford’s comments need to be taken in light of Shell’s participation in the fledgling Russian LNG sector. The company, the world’s largest corporate LNG buyer and seller, is currently involved in two Russian LNG projects: Baltic LNG and Sakhalin-2.

Shell is also forecasting that LNG sales will spike this year. Last month, the Anglo-Dutch oil major forecast that global LNG trade will rise 11 percent to 354 million tonnes this year as new facilities in Australia, the U.S., Russia and elsewhere increase supplies to Europe and Asia. More countries are also building LNG import or receiving terminals. Shell said that LNG trade rose by 27 million tonnes last year, with Chinese demand growth accounting for 16 million tonnes of those volumes.  However, some of this demand growth will not only come from China, but India, Pakistan, Bangladesh, Thailand, and in time the Philippines, and Vietnam. The Philippines and Vietnam, however, have yet to construct their first LNG receiving terminals.

By Tim Daiss for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage



Leave a comment
  • Bill Simpson on March 24 2019 said:
    Hey Russia, if you're listening, produce as much gas as you can to keep the price low.
  • Steven Conn on March 24 2019 said:
    Attempts to depict gas supplies from Russia as "geopolitically charged" have been around since at least 10 years ago. Reliable and consistent supplies have been heading from Russia to Europe since late 1960s and into today, a reality noted by Merkel and Austrian politicians, as well as by German, Italian, Austrian company heads. Russian share of EU gas market has grown over the last decade from 26-27% to 35-36% last year. Nord Stream 2 will deliver direct supplies and at lower prices than through Ukraine's decrepit pipeline network, which it inherited from Soviet Union. Moreover, EU energy companies will earn transit fees from Nord Stream 2 as they own 50% of the project. They are convinced that these fees, at around $300 million a year should be going into their pockets instead of Ukraine's corrupt and unpopular nationalist regime. The same is true of the Turkish Stream, with Turkey, Bulgaria, Serbia, and Hungary all expressing interest in seeing it transit their countries (explicitly saying so, in fact).

    Now with LNG, Russia in spite of US sanctions has succeeded in this sphere too. Since the salaries and most of spending is done in rubles, but the export earnings are in dollars, domestic production and transit costs have declined due to a weakened ruble, and its not surprise that large Russian metals and energy companies have all earned impressive profits in 2017 and 2018.

    US LNG and oil require a certain level of political coercion (and even trade blackmail) as is seen in the case of Germany and China. It is these that are politicized since they don't do well in a free market competition, which generally is reduced to price.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play