19.10.2022 Author: Vladimir Odintsov

Response to Western Gas Terrorism

At the recent Russian Energy Week (REW) forum, Russian leader Vladimir Putin made it clear that there is no doubt today that the Nord Stream incident is an act of international terrorism in its newest form. The aim of the attack was to undermine the energy security of the entire continent, cynically blocking the access to cheap Russian energy for the people of Europe in order to deprive millions of people and industrial consumers of gas, heat, electricity and other resources and force them to buy these at inflated prices.

 As a result of such provocative policies by the US and its Western allies, prices in Europe continue to rise amidst a gas crisis. 70% of production has already been halted, forcing the population to take extreme measures, Al Jazeera reported. Families sleep in the same room, and people with disabilities are no longer charging their electric wheelchairs to save money. In the worst-case scenario, the European economy is predicted to enter a phase of absolute free fall, with production coming to a complete halt because it is too expensive. European governments will be forced to prioritize the supply of gas for heating homes over running industry.

Although the damage to the Nord Stream pipes has directly affected European interests, the truth about the blowing up of Nord Stream and the name of the apparent instigator of this terrorist attack are being hushed up about in the EU, Guancha stresses. This, the publication notes, is a clear sign of the EU’s inability to assert its independence from the US. The EU is too weak to look for culprits and press charges.

Referring to the diversion of the Nord Stream pipeline, the Russian President assured that Moscow was ready to supply and deliver gas in full to Europe under the existing contracts. And behind what happened is someone who seeks to sever ties between Russia and Europe. And now, of course, the US can supply energy resources at high prices to the European continent, to reinforce its full control in the European space.

With the current political elite in Europe not daring to charge all the clear and known instigators and perpetrators for this gas terrorist attack, it is hardly appropriate for Russia to take the lead in this investigation from those who, at the behest of the same Washington, unleashed the anti-Russian sanctions policy and are now themselves the clear losers. Realizing the immorality and blatant orientation of the current EU authorities not towards the interests of European citizens, but only towards the United States, Russia has decided to divert its energy supplies from the European market to other parts of the world that are genuinely interested in such cooperation with Moscow.

The response to gas terrorism in the Baltic Sea has been Russia’s intention to significantly increase Russian gas supplies to China and Southeast Asia. The Power of Siberia pipeline, which is already in operation, delivered 15 billion cubic meters of gas to China last year. In 2023, 22 billion cubic meters is planned, and in 2027, 38 billion cubic meters. Russian Deputy Prime Minister Alexander Novak told Russian Energy Week that Russia will further develop its gas transportation infrastructure to supply Asia, given the region’s interest in Russian energy resources. An agreement has already been signed with China to supply an additional 10 billion cubic meters of gas per year through the Far Eastern route from Sakhalin. An expansion of the gas transportation system in this direction is now under discussion, and the construction of a part of the Power of Siberia 2 gas pipeline in Mongolia, with a total capacity of 50 billion cubic meters per year, will begin shortly. Prices and basic parameters of Russian gas supplies to China via Mongolia have already been agreed.  The Power of Siberia 2 gas pipeline could be launched by 2024. The part of this pipeline that will pass through Mongolian territory will be called Soyuz Vostok. Although a certain share of gas will be supplied to Mongolia, China will be the main buyer. The capacity of the Power of Siberia 2 is comparable to that of the Nord Stream 2. As for its predecessor, the Power of Siberia 1, it has a capacity of 38 billion cubic meters per year.

Thus, the volume of annual gas deliveries to China would be on par with Gazprom’s annual deliveries to Germany, which was Russia’s main natural gas trading partner in Europe in 2021. The development of the Power of Siberia 2 pipeline will continue the unification of the gas transportation system of Western and Eastern Siberia, will increase the gasification of a number of adjacent Russian regions, and will give an additional impetus to the economic and social development of Eastern Russia.

However, in addition to the pipeline gas, there has recently been a serious increase in the Asian market’s interest in LNG. For example, in early October, citing a spokesperson for Japan’s Mitsubishi Corp, Reuters reported that Malaysia’s Petronas had declared force majeure on its LNG exports because of a discovered leak on the Sabah-Sarawak subsea pipeline. Because of this incident, Japan will be hit by a reduction in gas pipeline supplies from Malaysia, and will find itself forced to look for liquefied gas on the spot market, where Europe actively buys it. The gas problems in Malaysia will also hit Europe, whose traders will have to compete with Japan for LNG cargoes on the spot market. At least the government in Tokyo has already granted a $900m loan to Japan’s Jera to buy additional volumes, which could also include LNG currently resold by China to the EU.

This will certainly increase the attractiveness of Russian LNG in the Asian market, particularly from the Sakhalin 2 project. This is why Japanese companies have already announced that they will retain their stakes and contracts for LNG supply in the new Sakhalin Energy operator.

Against this backdrop, Russian Deputy Prime Minister Alexander Novak stressed at Russian Energy Week the importance for Russia of expanding its export capacity by increasing its liquefied natural gas production capacity, of which about 30 million tons was produced in 2021.

As to the losses from the gas war with Russia, unleashed by the US on the European market, which, thanks to the “efforts” of Washington, was transformed into a gas terrorism, so far Europeans have been the sole victims of such actions of the “collective West.” And now EU countries have been forced, in the name of “solidarity with Washington” imposed by pro-American European officials, to buy LNG from the same US at blatantly inflated prices, paying for it with impoverishment, European de-industrialization and the growing misery of the EU residents.

Vladimir Odintsov, political observer, exclusively for the online magazine “New Eastern Outlook.