Unfortunately, gas is increasingly a zero-sum game. As black clouds loom on the horizon over Germany’s true willingness to act for a price cap at European level, the Financial Times decides when it’s time to reveal another of Pulcinella’s back-and-forth secrets Willing to misalign the EU’s dependence on Russia and an inevitable clash with reality.
Development of fill levels in German gas storage facilities Source: Macrobond / Andreas Steno
Distribution of natural gas supplier countries in Germany from April to June 2022 Source: Entsog / FNB
These two charts show the dynamics on the basis of which Berlin would eventually give in to Italian pressure for a collaborative discussion on the price cap: not only would German natural gas storage unexpectedly reach higher than 2021 levels to deal with the winter, but also everything Data for the month of August shows that Berlin’s dependence on Gazprom has fallen below the psychological double-digit threshold: just 9%.
Too bad that there are at least a few critical points. The first is the cost. If, in fact, the gas purchased from Holland and Norway is affected by the price increase, and the cost is structurally higher than that of Russia, it explains why Germany’s 1-year energy contract broke through the €1,000 per MWh mark for the first time ever on Monday, coinciding with the 20 percent drop in futures contract valuations in Amsterdam. And that, even more disturbing when you look at it in perspective, Uniper, which had already been rescued, collected another 4 billion euros in cash from the statesince it was forced to spend about 100 million a day on the spot market to buy non-Russian gas.
in summary, Independence from Moscow is fundamentally wrong. This is because, even in the short term, it entails unbearable costs. And here is the second criticality. Because the Financial Times has given this voice a name Other countries, which in the chart already accounts for 23% of total gas imports from Germany in August: China. And, further irony, the liquefied gas that Beijing is selling to Europe with a shovel is none other than the Russian gas that Berlin and its partners boast of having gotten rid of. In fact, in the first six months of this year, China bought a total of 2.35 million tons of LNG worth $2.16 billion. A volume increase of 28.7% on an annual basis, while at the sales level there is even talk of + 182%. in summary, Sanctioned Russia has overtaken Indonesia and the US to become China’s fourth-largest LNG supplier as of early 2022.
And we are not talking about gas transported via pipelines, since in this case Gazprom has just announced that transits through Power of Siberia to China have just reached their all-time high, +63.4% in H1 2022. In short , then we are not talking about the fourth supplier, but about the second after only Turkmenistan, just to refute another false narrative that without Europe, Russia would have to burn unsold gas. And here the Financial Times asked the million-dollar question: With Chinese economic activity slowing, part of the industrial complex shutting down due to Covid outbreaks, and domestic demand not requiring additional energy, What is Beijing doing with all that gas? He sells it to Europe.
For the City newspaper, the world’s largest LNG importer is actually selling whole truckloads of liquefied natural gas to a Europe dreading the prospect of a winter without further flows from Russia. And FT always warns against any willingness to operate in a mode of semantic ambiguity: the EU states do not buy Chinese surpluses, but Russian gas in all respects and with all the trimmings. In short, a round game. And the Chinese media were the only ones to announce recently – without any denial from European actors State-owned subsidiary Sinopec sold 45 cargo loads of LNG, equivalent to 3.15 million tons. But Beijing is also believed to have sold a total of about 4 million tons to Europe in the first six months of this year alone. that is 7% of all European imports in this period.
In short, or you’ll swoon with US LNG, which is now untraceable due to the strange Freeport fire that blocked exports until mid-November or to Norway and Holland. Or you get Russian gas from China. In the series, instead of fighting one enemy, I make two happy at the same time. Moreover, they operate in a mode of total hypocrisy, as European states officially deny violations of anti-Russian verbal agreements, claims that this gas originated in China as it was cleared by Beijing authorities before being resold. Aside from the mockery now touching on the European sanctions strategy, it is the political data that is worrying: Before this step China may decide to structurally sell its surplus to Europe and become Gazprom’s fifth commercial pillar.
It is a new blackmailer, politically no less anti-West than Moscow. In short, a true masterpiece. And if that were the case, it would only take a European breath to defend Taiwan’s independence or condemn Hong Kong’s repression to see Russian gas disappear from the spot market – at its excellent price compared to the US and Norway, but also to Algeria – which they continued to buy under false names. And at a different latitude, the problem would reappear. Someone’s stopping this carousel. And the endless farce of sanctions. And so on.