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China as a monopsony buyer of Russian gas will be able to set the price, even one that does not recoup the capital costs. Even before the invasion, the Power o

China as a monopsony buyer of Russian gas will be able to set the price, even one that does not recoup the capital costs. Even before the invasion, the Power of Siberia had been viewed as extremely unprofitable (it seems likely that corruption played a major role in driving up costs), and then there's the further issue that more work is necessary for it to send its total capacity, which is a fraction of what it sends to Europe. > Yet the project does not appear to be as grand a success as Moscow would have liked it to be. To begin with, the capacity of gas production on the Russian side of the border is open to doubt. The Chayanda gas field in Yakutia region, currently the only source of gas for the pipeline, can produce up to 25 bcm a year. > To deliver 38 bcm to China, Gazprom has to develop another large field, Kovykta in the Irkutsk region some 800km south of Chayanda, and connect it to the Power of Siberia with another pipeline, which has not been built yet. The completion of the infrastructure needed for pumping the required volume to China is probably going to take more than 10 years, according to Gazprom’s pre-feasibility study of the project. > ... > Currently Gazprom sends westwards about 200 bcm annually via a number of pipeline routes. The Power of Siberia project, however, has a limit of 38 bcm and it is unlikely that another major pipeline project would be launched any time soon. Thus, the Russian company would not be able to switch export flows as it pleases.

riku_iki 5y ago
> China as a monopsony buyer of Russian gas will be able to set the price Is it just China? EU also will continue buying gas, and prices are much higher now than year ago.
- mannerheim 5y ago
  EU will continue for now, but there's a significant push to move away from Russian gas in many European countries in the next year or two. And if Russia takes over all of Ukraine, I expect sanctions to target energy as well. If they target oil, Putin has threatened to shut off European access to gas - we will see if that's a bluff or not.
  - riku_iki 5y ago
    > EU will continue for now, but there's a significant push to move away from Russian gas in many European countries in the next year or two. the question is if those countries will have strong commitment to invest into significant and non-trivial infrastructure rebuild, or it will be just speeches from politicians. > Russia takes over all of Ukraine I don't think this was ever goal of Russia. I think they wanted to occupy some southern and eastern regions, force Ukraine to recognize Russian Crimea and set some puppet government in Kyiv. I believe Ukraine and Russia will reach some agreement soon, Ukraine will likely lose some territory and political independence, and in 3 years Europeans will mostly forget about this stuff, will be destructed by other issues and continue buying Russian oil and gas.
    - mannerheim 5y ago
      > and set some puppet government in Kyiv That's what I meant by taking over all of Ukraine. If Russia sets up a puppet government, then I expect further sanctions. Maybe they won't if a settlement is reached with the current government.

riku_iki 5y ago

> China as a monopsony buyer of Russian gas will be able to set the price Is it just China? EU also will continue buying gas, and prices are much higher now than year ago.

mannerheim 5y ago
EU will continue for now, but there's a significant push to move away from Russian gas in many European countries in the next year or two. And if Russia takes over all of Ukraine, I expect sanctions to target energy as well. If they target oil, Putin has threatened to shut off European access to gas - we will see if that's a bluff or not.
- riku_iki 5y ago
  > EU will continue for now, but there's a significant push to move away from Russian gas in many European countries in the next year or two. the question is if those countries will have strong commitment to invest into significant and non-trivial infrastructure rebuild, or it will be just speeches from politicians. > Russia takes over all of Ukraine I don't think this was ever goal of Russia. I think they wanted to occupy some southern and eastern regions, force Ukraine to recognize Russian Crimea and set some puppet government in Kyiv. I believe Ukraine and Russia will reach some agreement soon, Ukraine will likely lose some territory and political independence, and in 3 years Europeans will mostly forget about this stuff, will be destructed by other issues and continue buying Russian oil and gas.
  - mannerheim 5y ago
    > and set some puppet government in Kyiv That's what I meant by taking over all of Ukraine. If Russia sets up a puppet government, then I expect further sanctions. Maybe they won't if a settlement is reached with the current government.