[deleted] t1_iu4imk7 wrote on October 28, 2022 at 2:23 PM

[removed]

No_Zookeepergame_27 OP t1_iu4f3q0 wrote on October 28, 2022 at 1:58 PM

Europe Can’t Rely on US Gas to Plug Growing Gap Next Year (1)

Friday, October 28, 2022 04:00 AM By Anna Shiryaevskaya and Sergio Chapa

US LNG exports won’t be able to plug drop in Russian flows Filling European storage sites will be harder to do next year (Bloomberg) --Europe has been able to plug the gap left by smaller Russian gas flows with US supplies, but those shipments won’t be able to keep up as the shortfall expands. While US fuel now makes up 40% of Europe’s liquefied natural gas imports, it will only offset a fraction of the deficit from Russia next summer, BloombergNEF says. That means it’ll be harder to rebuild inventories next year when faced with a longer period without Russian gas.

Securing shipments not needed by top buyer Asia has been crucial for Europe as it swaps piped supplies for the super-chilled fuel. To meet demand going forward, it needs to remain an attractive market for sellers and pull about 70% of global spot supplies, primarily from the US, as LNG output growth remains limited in the next few years.

Since supply cuts from Russia -- once Europe’s top gas supplier -- didn’t come until late into the summer storage campaign, the lack of flows will be even more glaring next year. That will require more LNG, but also “persistent demand destruction,” BNEF said Thursday in a report.

“US supply is particularly price sensitive and will flow to the premium market, which Europe will remain unless Asian demand picks up,” BNEF analyst Arun Toora said. “However the year-on-year increase is not sufficient to offset a total cut in Russian piped supply with under half of these volumes met by LNG increases.”

LNG imports into northwest Europe and Italy between April and September will probably rise by 9 billion cubic meters from a year earlier, according to BNEF. But with key Nord Stream pipeline supply halted and the ongoing risk of a complete shutoff via Ukraine, the shortfall from Russia could reach 20 billion cubic meters.

One problem is that there’s a limit to US supplies. An outage at the Freeport project in Texas means American LNG exports will rise by a less-than-expected 12% this year, and increase by a similar rate in 2023, according to Bloomberg Intelligence.

Another issue is uncertainty over where that LNG will go. Energy majors and traders have secured most US exports and also largely locked in future American supplies, and can send them to where prices are highest. That means more may head to China if easing of Covid restrictions boosts demand there, rather than to Europe.

US Market

Europe’s purchases are helping the US to keep gas exports near maximum levels and to cap a widening trade deficit. But strong global demand is also causing historically high prices in America, adding to household energy bills and fueling inflation.

And in New England, there’s a risk of gas shortages this winter due to high US exports, the Federal Energy Regulatory Commission said.

America is now sending about 60% of its supply to Europe, double last year’s share, said Xi Nan, an analyst at Norwegian consultant Rystad Energy. US Secretary of State Antony Blinken said the US is working to further boost that trade after becoming the top LNG supplier to the European Union and UK this year.

How full Europe’s storage sites get next summer will be a direct consequence of the amount LNG Europe can pull from global markets. More than 43% of the fuel can go anywhere according to contracts, BNEF’s database shows.

Should the region import 60% of spot LNG, storage injection rates could stumble and reach just below 70% by the end of the summer, BNEF said in its monthly outlook. This year, they have reached 94% full.

US LNG exports - largely all destination-flexible - have grown steadily since starting in 2016 amid a shale-gas boom and have mainly gone to South America and Asia. That changed late last year when soaring prices in Europe prompted traders to divert cargoes -- sometimes mid-journey -- as the region weaned itself of Russian gas that it had been tied to for decades.

Still, the amount of extra LNG that could offset lost Russian flows to Europe may drop to 35% next summer from 42% this winter, BNEF says. Yet supplies -- mostly from the US -- should pick up with the next wave of projects starting in late 2024. Europe also needs to expand capacity to import LNG and ease infrastructure bottlenecks.

“The US will need to expand its LNG export capacity and the EU will need to expand its import capacity over the next several years,” Rystad Energy said in a study.

No_Zookeepergame_27 OP t1_iu4fbz1 wrote on October 28, 2022 at 2:00 PM

Hopefully by then Ukrainians will have kicked Russian asses back to their dying 3rd world motherland.

totoGalaxias t1_iu4qlv4 wrote on October 28, 2022 at 3:18 PM

So how would that supply gas to Europe?

No_Zookeepergame_27 OP t1_iu4qsuy wrote on October 28, 2022 at 3:19 PM

You do realize Ukraine has a massive gas reserve in the Donbas region right? Europe won’t ever have to rely on Russian gas again.

totoGalaxias t1_iu4r7ft wrote on October 28, 2022 at 3:22 PM

I did not know that. How readily accessible is it?

Loltty t1_iu4rhbw wrote on October 28, 2022 at 3:24 PM

Crimea is also full of oil and gas.

Wonder why Russia decided to invade /s

Ehldas t1_iu4sy1w wrote on October 28, 2022 at 3:34 PM

https://en.wikipedia.org/wiki/Natural_gas_in_Ukraine

It's got over 1,000bcm of proven on-land reserves, with huge additional resources in the Black Sea and Sea of Azov.

Once the regain control of they Donbass producing that gas and oil will no doubt be a major part of their recovery plans.

totoGalaxias t1_iu4tavt wrote on October 28, 2022 at 3:36 PM

So it won't be ready for next year you're saying?

Ehldas t1_iu4ufsi wrote on October 28, 2022 at 3:44 PM

It's going to take many months or a year before Ukraine has regained control over Donbass, and rebuilding the damage that Russia has done will take years. Energy infrastructure will undoubtedly be a priority both because it's needed for the Ukrainian people themselves, and because it's an immensely valuable cash export to stabilise their economy.

But no, it's highly unlikely to be contributing to European exports next year.

Once it's producing, however, Russian markets in Europe are gone forever.

totoGalaxias t1_iu4vs1q wrote on October 28, 2022 at 3:52 PM

Thanks for your reasoned opinion. I personally think that if not for seismic shift in Russian politics, retaking the the majority of the Donbass will be impossible. However, I am not super informed on how it could happen otherwise.

Ehldas t1_iu4wugw wrote on October 28, 2022 at 3:59 PM

> I personally think that if not for seismic shift in Russian politics, retaking the the majority of the Donbass will be impossible.

I'm not sure why you think this? If you look at the last few months, the trajectory has been clear : Ukrainian forces are advancing steadily and have retaken over 7,000km^2 of territory. They have attacked and beaten basically every form of Russian units that exist, and continued forward. Ukraine are dictating the operational tempo, Ukraine are choosing where to attack, and Ukraine are winning the battles that they choose to fight. Conversely, Russians are not winning any fights. The only battle that they've chosen to engage in is around Bakhmut, which they've been attempting to capture for three months now and are having to retreat from this week.

Simultaneously, Ukrainian force levels, training and equipment are improving on a day to day basis, while Russian equivalents are disimproving : they're losing T70/80/90 tanks and backfilling them with T64s, they're losing soldiers and replacing them with untrained conscripts without proper training weapons or armour, and they're retreating from prepared defensive positions and having to escape back to less suitable secondary lines.

Given this situation, unless something fundamentally changes, Ukraine will simply keep retaking territory until they have cleared Russian forces entirely. What is it that you think is going to change in the Russian position which will materially affect the situation?

totoGalaxias t1_iuhmv5m wrote on October 31, 2022 at 12:21 PM

Ok, this is my opinion. Probably not very popular. I think Ukraine won't be able to regain much more territory for various reasons. One, the country's economy has shrank by half. Right now the government relay on international interventions to sustain itself.

Then, we had this round of tactical attacks from Russia that destroyed something like 30% of the electrical infrastructure in a matter of a week. This I think shows how Russia has a lot lieu way to up the ante.

Sure, the Ukraine army has made important gains lately, but for how long they can sustain this? I do think the Russian army has wiped out a big chunk of the original army, which was very well trained one by the way. Now you have a situation were Ukraine is both trying to gather more combatants from an shrinking population. Plus, they have to learn to use all the donated equipment and figure out how to incorporate it into their tactics.

Then again, I don't know much about warfare and my opinion is based on information that I don't know if it is entirely reliable.

Ehldas t1_iuhor19 wrote on October 31, 2022 at 12:39 PM

>One, the country's economy has shrank by half. Right now the government relay on international interventions to sustain itself.

That's not actually a major issue, in the medium to long term which is how we look at these things. A vast amount of Ukraine's economic output is currently going to supporting the war effort, and a lot more has been disrupted. Once this has been resolved, however, the expectation is that the people and companies which constituted the economy of Ukraine before the war will remain, that Ukraine will regain control of the critical Donbass region (industry and energy) and that Ukraine will gain accelerated access to EU trade corridors and support. Economically, Ukraine doesn't have a great deal to worry about.

>Then, we had this round of tactical attacks from Russia that destroyed something like 30% of the electrical infrastructure in a matter of a week. This I think shows how Russia has a lot lieu way to up the ante.

Most of the infrastructure is being repaired as fast as it's being damaged. Also, Russia is rapidly running out of room with this tactic. The shootdown rate on the missiles it fired today was 88%, and it simply doesn't have too many more of those salvoes to fire. As Ukraine gains access to more and more anti-air defence, Russia's ability to inflict this sort of damage will drop steadily. That's not to say that it's not a major problem, but it's solvable and it's short term.

>Sure, the Ukraine army has made important gains lately, but for how long they can sustain this?

They can sustain it until something specific occurs to change the fact that Ukraine can make gains. What, in your opinion, is this specific thing?

>I do think the Russian army has wiped out a big chunk of the original army, which was very well trained one by the way.

Why do you think this? The Ukrainian army has been steadily increasing in size as they integrate more and more trained units. They've had tens of thousands of troops trained abroad, and these numbers are only increasing. The quality of weapons which which Ukrainian forces are armed are likewise improving steadily. No-one knows what they Ukrainian casualty numbers are, but Ukraine are demonstrably putting more and more troops in play so their casualties are lower than their recruitment and training rate.

>Then again, I don't know much about warfare

Finally we agree on something.

totoGalaxias t1_iui28mv wrote on October 31, 2022 at 2:26 PM

I don't see how the economical situation in Ukraine is sustainable. Right now they depend on the support of its allies both to sustain the working of the government as well as the supply of weapons. The hope is that this support outlasts the resiliency of the Russian invasion I suppose.

I honestly don't think that Ukrainians are able to reconstruct as fast as you think, mainly due to the austerity brought up by the conflict itself. And all of this damage happened in just two weeks of this type of attacks. Your assumption is that the Russian army can't keep up with this effort and that Ukraine air defenses have been brought up to a level where they now can handle it. And as far as I understand, all of this damage was inflicted using the less expensive kamikaze drones.

I do think casualties in the Ukrainian army are huge. Training tens of thousands won't be enough to go on the offensive to reclaim all the lost territory. Specially now that the mobilized Russian conscripts start joining the ranks of the occupation. At the start of the war, the Ukraine army was even better equipped then now I believe. Even with all of that the Russian army was able to occupy a big chunk of the country. Ukraine even a functional air force too. Now that is all gone.

So yes, I don't know how in the mid or long term Ukraine can go on an offensive to reclaim the lost territories.

Ehldas t1_iui4hwr wrote on October 31, 2022 at 2:42 PM

>I don't see how the economical situation in Ukraine is sustainable. Right now they depend on the support of its allies both to sustain the working of the government as well as the supply of weapons.

Er... yes, and that is fully sustainable. Both the EU and the US have guaranteed stable revenue supports of around $3bn per month for all of next year.

>I honestly don't think that Ukrainians are able to reconstruct as fast as you think, mainly due to the austerity brought up by the conflict itself.

The power outages are in general lasting hours or a couple of days at maximum. Roads and rail are literally being repaired the next day.

Major infrastructure like buildings, etc. take a lot longer, obviously, but they're still in the process of being repaired already.

>Your assumption is that the Russian army can't keep up with this effort

That is not my assumption, it's the analysis of the military experts who have good estimates of how many missiles Russia had before the war, and how many they've been seen to fire off. They are running incredibly low on missiles.

>and that Ukraine air defenses have been brought up to a level where they now can handle it.

We've seen the Ukrainian success rate climb steadily in the last few weeks, and there is currently only a single active Iris-T system in the country. That will be joined by 3 more Iris-T and 4 more NASAMS in the next few weeks.

>I do think casualties in the Ukrainian army are huge.

You have repeatedly mentioned this, but have given no supporting evidence.

>Training tens of thousands won't be enough to go on the offensive to reclaim all the lost territory.

They are already on the offensive with the force levels they have now, and successfully reclaiming territory, while training up additional forces and integrating additional modern weaponry. Which is back to my first point : what do you think is going to change to make this stop happening? You didn't have an answer for that.

>Specially now that the mobilized Russian conscripts start joining the ranks of the occupation.

The Russian conscripts are a joke. Seriously. They're untrained, they're barely armed, they have no winter clothes and they're going to die by the tens of thousands. They actively interfere with the military efficiency of units to which they're attached.

>At the start of the war, the Ukraine army was even better equipped then now I believe.

Horseshit. At the start of the war Ukraine was very poorly armed. They were running on older Soviet kit and had much fewer forces. Since then they have steadily shifted to modern NATO weapons as they burn down the last of their Soviet-era ammunition, and they have increased the number of troops in active use. They have limited the speed of recruitment only to the number that they can train and arm, but that's an ongoing process. They had little antitank and antiair capability, and only the same inaccurate artillery and rockets as Russia does.

>Even with all of that the Russian army was able to occupy a big chunk of the country.

They took that territory with a massive attack from four directions, assisted by traitors within Ukraine. Since that time they have steadily been losing territory, and the pace at which they're losing territory is increasing. They have not successfully taken any territory in 3-4 months now, so what they did in February is not relevant.

>So yes, I don't know how in the mid or long term Ukraine can go on an offensive to reclaim the lost territories.

You don't know how Ukraine can do exactly what they're currently doing?

It fits with you being wrong on almost every single point of fact above, however, so I'm not surprised.

OpportunityKey1575 t1_iu4fwhe wrote on October 28, 2022 at 2:04 PM

I wish for the same thing mate.

chibiace t1_iu4ndhf wrote on October 28, 2022 at 2:56 PM

the moral of the story is to never trust any external entity (russia, usa etc) for your critical energy supply

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Circus_Brimstone t1_iu4fiu8 wrote on October 28, 2022 at 2:01 PM

If only they had nuclear power......

[deleted] t1_iu4j6k2 wrote on October 28, 2022 at 2:27 PM