Quote (Black XistenZ @ 6 Feb 2024 16:10)
Russia had always been willing to sell more gas than the contractually guaranteed minimum in the past, but in 2021, they suddenly refused. Which led to Germany entering the winter in which Russia would invade Ukraine with dangerously low filling levels in its gas storages. You're intentionally naive if you seriously believe that this was a coincidence.
Russia at the time wanted us to sign very long-running contracts with a very high volume of gas that we'd be contractually obliged to take. If we had agreed to such a contract, it would have been even more costly to phase out Russian gas after the invasion. Germany would have had to either pay billions upon billions for gas deliveries which it doesn't take, or pay billions upon billions for breach of contract in international courts of arbitration, or completely stand against its allies by continuing trade with Russia as if nothing happened. We would have been even more trapped, which is exactly what Russia was going for with these contracts.
Gazprom was negotiating 5 to 10 years take or pay contracts to guarantee cashflow to use to finance gas projects. Any project financier will tell you - you cannot launch a project if you don’t have a guaranteed long term contract to ensure you will earn your money back. This works the same way in Renewables or PPPs (eg govt guaranteeing floor offtake price for 10 years to get windpark up and running) or any other big long term deal. Why would Russia waste money and years building up gas export capacity when its customer might flake and decide to decarbonize next year because some leftie greens are in power? This is a waste of money, resources and time and you can’t make investment decisions based on assumptions that Germany will still want to buy spot 5 years down the road when the field comes online.
Once again - you cannot blame Russia for selling their excess gas somewhere else. This is not how the world works. If you want it more and guaranteed - sing a long term contract.
Instead: Germany has spit into the face of its long term partner and signed a 15(!!!) year take-or-pay with ConocoPhillips and Qatar.
https://www.aljazeera.com/news/2022/11/29/qatarenergy-conocophillips-sign-lng-deal-for-germanyHere is a typical long term LNG contract Qatar signs (courtesy of PSO who was obliged to make it public). “Take-or-pay” is clause 8.
https://psopk.com/files/home/use_full_links/qg_executed_redacted_version.pdfDon’t forget that Qatar directly hosts and sponsors HAMAS so money that will be paid to Qatar for 15 years will go directly against German foreign policy of supporting Israel.
This literally makes no sense.
Re-China I feel we are going to deep and perhaps this is not a correct topic for that. Let’s move this discussion somewhere else - im happy to continue.
This post was edited by Malopox on Feb 6 2024 10:04am