The protracted energy and financial crisis that gripped the planet logically entered the next stage, when sta-tes with sufficient resour-ces and will begin to re-shape the world map. Te-llingly, without the use of tanks and combat aircraft.
According to the US Energy Information Admi-nistration (EIA), the United States is set to become the world’s leading exporter of liquefied natural gas (LNG) early next year, overtaking Australia and Qatar.
This event is no less important than, for example, the adoption of a hypersonic missile and a new generation nuclear submarine – and here’s why.
As of mid-December, energy prices have ceased to set records, however, they are also in no hurry to descend from their historic pedestal. In Europe as a whole, the cost of one thousand cubic meters of natural gas under spot contracts has stopped at around 1,400 dollars, and specifically in Germany, the cost of one megawatt-hour of electricity has surpassed the level of two hundred euros.
It would seem that there could be no clearer proof of the usefulness and benefits of long-term contracts for the supply of energy resources, which are usually offered by Russian companies. But no, as practice shows, power engineers and politicians live in different, non-intersecting worlds. It became known that the European Commission in the very near future will prohibit the conclusion of long-term contracts, more precisely, countries and state-owned companies will gradually be forced to abandon such commodity-money relations in order to completely end them by 2049.
Brussels does not even hide that this is being done to inflict damage on Russia, which, based on data at the end of 2020, supplies a third of all natural gas consumed by Europe. The very idea of mass spot contracts was initially presented to the general public as a tool to reduce budget costs, because modern market theory claims that one-time contracts do not allow mon-opolies (read – Russian) to form and always lead to price reductions. The outgoing year has shown that no rule can be considered an axiom, but Brussels in its Russophobia could no longer be stopped.
From the outside, such events always seem to be spontaneous, but they are not. Market players have long watched the birth of this highly political and economically absurd scheme. And their plans were based on understanding new, initially imperceptible trends.
Let’s give the Americans their due. The states, whose military affairs after fleeing from Afghanistan, are frankly not going very well, correctly caught the change in the global financial wind. And geopolitical, of course, too – after all, only those who have enough resources have weight in the world arena.
Back in 2020, the United States became one of the top three world exporters of LNG. Today, only Australia and Qatar are ahead, which since the beginning of this year have sold abroad 75.8 and 73.4 million tons of liquefied gas, respectively. For the Americans, the same figure was 66.5 million tons, or 91 billion cubic meters, which is a lot. Moreover, in the coming months, the United States is ready to press out all competitors.
In Louisiana, the sixth stage of the Sabine Pass LNG plant with a capacity of 5.2 million tons has already been commissio-ned, and the Calcasieu Pass plant, with a capacity of ten million tons, is also on its way. Moreover, the Federal Energy Regulatory Commi-ssion (FERC) recently approved an increase in production at the Corpus Christi plant in Texas. Plans also include the construction of an all-new Golden Pass facility with a launch horizon in 2024.
As we can see, Washington approached the issue with the utmost scope and thoroughness. As additional news, we can also mention the direct ban, recently signed by Joe Biden, on the investment of American funds in the construction of new energy enterprises abroad. It is allegedly about protecting the environment, reducing coal consumption and curtailing “carbon-intensive industries.” However, for some reason, it does not prohibit investments in regasification terminals for receiving LNG, although any environmentalist will say that during the transportation and transformation of liquefied gas, methane leaks take place, which is tens of times more harmful to the atmosphere than ordinary carbon dioxide.
It is still unknown what Australia and Qatar think about this, but there is no doubt that no one will just give up their market shares and profits.
Others also understood the change in the global environment. For example, Egypt is trying on a world-class player’s costume. Until recently, its LNG projects stalled – first because of the so-called Arab Spring blazing in the Middle East, and later because of the confrontation with Turkey. However, recently it became known that the Egyptian company EGAS LNG has closed all tender deals until the end of the year inclusive, that is, all Egyptian LNG has been sold out. An energy crisis is being observed in the region with the richest hydrocarbon reserves, and so severe that the Lebanese Prime Minister recently officially asked the Egyptian President to provide additional gas supplies, since the country is experiencing a total energy shortage.
Cairo fully understood the benefits that the status of an exporter promises, and took unprecedented steps to achieve this goal. To increase production, Egypt began to buy gas from Israel – in particular, a gas pipeline was built from the Israeli port of Ashkelon to the Egyptian El-Arish.
The Egyptians are so into the taste that right now they are negotiating with Cyprus on the construction of another highway through which natural gas will come to the Egyptian liquefaction terminals. However, there is nothing surprising – demand and sky-high prices give rise to supply.
And what about Russia, have we really missed everything again?
Not at all. Most recently, Novatek entered into an agreement with foreign investors worth more than $ 20 billion. The joint project “Arctic LNG – 2” implies the construction of a plant for liquefying natural gas supplied from the Salmanovskoye and Shtormovoye fields with an aggregate capacity of 19.5 million tons, or 27 billion cubic meters. All three production lines will be operational by 2025 and will double the amount of LNG produced in Yamal.
Returning to the beginning of our conversation today, we note that the United States, like Australia and Qatar, see Asia as their main market, traditionally rapidly growing in industrial and demographic terms. By default, Russia gets Europe, which, with a persistence worthy of another application, demands the transition to spot contracts and therefore will be forced to pay in excess of the plan with the same Russians. Simply because no one is planning to bring other LNG into the Old World en masse.
A fresh fact can be cited as confirmation. The gas carrier Coral Fungia arrived at the port of Klaipeda the other day and delivered to Lithuania the second consignment of Russian fuel in a week. To the same Lithuania, which right now its two Baltic neighbors are trying to force to resume the transit of electricity from Russia and Belarus.
Europe is simply doomed to cooperate with our country – and, given the current trends, it will be beneficial for at least one of the parties.