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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: E_K_S who wrote (202061)	7/22/2021 2:22:24 PM
From: kidl	Respond to of 206084

I think we have to take the timing of the Nord Stream 2 project into consideration. It all started in 2015. A lot has changed since then especially on the LNG front.

To: E_K_S who wrote (202061)	7/22/2021 2:34:26 PM
From: Elroy Jetson	3 Recommendations Recommended By E_K_S kidl stsimon Read Replies (1) \| Respond to of 206084

Here's some interesting issues to think about. 1.) Towards the end of the Soviet era, East Germany had become wholly economically dependent upon West Germany, which made reunification very easy to accomplish. It was very tough for the East German government to ever say no to the West Germany writing their paychecks. You can count on the fact that Germany views purchasing natural gas from Russia is a very similar light. The money flow from Germany which will quickly become essential to the Russian economy will make Russia compliant with EU wishes in the same way this policy undermined former East Germany's independence. Take away their oil and gas sector and Russia effectively has no economy. 2.) Russia would like to maximize their natural gas price. Their price is clearly being set by the alternative cost of buying LNG - which is very profitable for Russia. My calculation shows Russia will be able to earn back the cash cost of the NordStream 2 pipeline within the first year of full production. 3.) The cost of natural gas piped from Russia is far below the costs of LNG. If US LNG suppliers want to sell their product to Europe at "Spot Price" rather than using long-term price-indexed contracts, Russia could easily reduce gas prices for a time making LNG grossly uneconomic when ever they desire. Long-term contracts with benchmarked prices is the only way for LNG trade to Europe to make sense to all parties. US LNG can easily become one of Europe's many suppliers of natural gas, but it's going to require long term contracts.