Panel Two:
The Southern Gas Corridor, TurkStream and LNG:
Competition or Rivalry?
“The Southern Gas Corridor in 2020 and EU Energy Security”
Robert M. Scher
Head of International Affairs, BP America
“Competition or Rivalry: Impact on Ukraine”
Benjamin L. Schmitt
Postdoctoral Research Fellow, Harvard University
Fmr. European Energy Security Advisor, U.S. Department of State
“Prospects for LNG Supplies to the Balkans”
Rauf Mammadov
Senior Fellow, The Middle-East Institute
Discussant and Moderator:
Ambassador Robert Cekuta
Board Member, Caspian Policy Center
***
Concluding Remarks
We’re beginning our second panel which is going to be focused mostly on on the new energy sources new gas sources in the Balkans and what their plans are the southern gas corridor truck stream and LNG and I would like to introduce our moderator master Checotah who was ambassador to azerbaijan between 2015
And 2018 he is now with the Caspian Policy Center and he just came back from Azerbaijan so he will bring us also some news we have three distinguished panelists today ambassador shared who is now chairman of BP in the United States we have Benjamin Smith who was with State Department energy bureau for
Several years and we have Rove Mammadov who is a fellow with Jamestown and the Middle East Institute who is going to talk about different aspects of the topic today ambassador ciabatta please oh okay thank you very much thank you very much this is actually perfect timing because
On Friday in Baku they will have I think it’s now the fifth southern gas corridor ministerial Advisory Council meeting this is a time when the minister’s with all the countries that are involved in the southern gas corridor get together look at progress is from made chart chart the next pass next steps forward
This year it’s particularly interesting because in many ways we’re coming to the end of the southern gas quarter but one of the things which I heard about when I was there last week was looking at this part of the world looking at the Caspian Basin as a source of energy supply for
The Balkans and so a number of ministers for the Balkan countries are expected to attend Friday’s meetings so again perfect timing and it also feeds well with what it is we’ve been talking about here if I may say a couple things just to sort of get us started and these are personal
Opinions but sort of as we sort of heard earlier today North stream two escaped much of the media attention that was paid turk stream and maybe that’s a Freudian slip turk stream escaped bunch of the media attention that was paid to North stream too even though it exhibits
Many of the same reasons for international concerns first of all as we said no new molecules to burst your boost European and global energy security while providing a new avenue for Russia to use energy as a means to exert pressure on Europe threatening country’s energy security stability and independence secondly
Turks stream can also undercut decades of US diplomacy designed to help develop a to bring to market the energy resources of the South Caucasus and Central Asia in a manner that prevents them from being interdicted by potentially hostile powers so I think you our purpose here today is not just
To analyze discuss the problem but maybe see if we can look at the various factors in play and see if we can come up with some effective ways to address them so with that I would like to turn the floor over to my colleague Bob sheriff from from BP well thank you I
Think I speak for everyone from BP who hopes that the southern gas corridor isn’t over once it’s completed we’re looking forward to actually uh providing gas and getting paid for it but anyway sorry I guess that’s a different conversation look thanks thanks Bob thanks to the jamestown foundation for facilitating tonight’s or today’s
Conversation obviously this is an important region for not just BP but in fact globally and I’m glad that it continues to get the attention of many of the the smaller and and and intensively focused organizations around the city because of that I think I’m gonna make two assertions and hopefully
Back them up a little bit as well but trying to stay within the the realm of the factual not I I work for an energy company not we’re not political we try not to get in the midst of that it’s sometimes hard to avoid it but I’m gonna
Give it a shot but I do think it’s fair to say that the southern gas corridor is a strategic link between Europe and the Caspian region I think everyone has seen it as this this is one of the reasons that it has had bipartisan support in
The United States why it has had wide support in Europe and why it’s important to the countries through which this this pipeline goes um second of all I think an important piece is that energy security increases with diversity of supply again one of the principles of why the southern gas corridor something
That’s been supportive but I think important as you look around the region you look at the whole conversation we had earlier on the gas to gas competition diversity of supply really is the important piece of all of this so I’d like to give a little context on
What the southern gas corridor is for those of you who may not be familiar with it and I will try not to dwell too much given that many of you I believe are I think as we all know is sort of first proposed in the European Commission’s can strategically review 2008 there are
Multiple pieces to this although we talk about this as one contiguous pipeline at ease but it is actually from operational perspective a number of different pieces there’s the the field in in Azerbaijan off the coast and the Caspian of shock Denise – there’s the South Caucasus panshin that goes through Raja bhaijaan
And Georgia there’s tap the trans Anatolian pipeline in Turkey and then tap sorry tan app and then tap the Greece Albanian Italy piece of this and I do think it’s important because there are different actors different players in each one of these although there’s consistency with BP and
So car being a part of all of them we obviously are very proud to be a part of this consortium that we have a long history in Azerbaijan not just in gas but in oil the contract of the century which obviously many companies Western companies sign to some extent we are we
Were one of the remaining ones still invested and still continuing that work in harsh repression I’m looking to increase our exploration there in the the region at the peak this employed 30,000 people across Azerbaijan and Georgia the first piece was delivered on time and on budget we were able to start
Up shock Denise – which is really the biggest portfolio project project in bp’s portfolio for a long time and a huge direct investment in the region as you guys know I’m sure 16 billion cubic meters of gas per years what we’re looking at six transit countries 11 shareholders 11 gas buyers again it’s
That strategic link it is not just important that we are providing gas to consumers and people who have countries that need it but also how many countries are involved how much the political piece to all of this the cooperation that had to be driven amongst all of these countries and customers and how
Across the private sector as well as the public sector so and again where we stand is that looking at that diversity of supply that second piece I think is important take a little bit of a tangent here because I think it’s important having heard a lot of the conversation in the
Beginning I do think it’s worth noting in 2017 I think people here can can correct me but somewhere between 35 and 40 percent of the –use gas supply came from Russia that is a that you know if I get it right that’s the fact interestingly over 40 percent at the
Same time of the oil that went to Europe was from Russia but as I often say when I go to to Brussels no one’s going to complain to me about the dominance of Russia in the oil market in Europe now why is that because it’s the market because everyone knows that that the
Market is pardon the pun far more liquid in oil and that one country one supplier doesn’t have as much of an impact on setting prices on some on using that the infrastructure in gas is much more fixed the lines are much more clear and it is less liquid of a market but that’s
Really the key and I think it came out in the morning but I can’t emphasize it enough in that diversity of supply integration of the infrastructure increasing the amount of liquification plants to deal with LNG all of that provides a ceiling on what manipulation could work might not be done by any
Supplier because there will be other sources available so recognizing that that for I think for us in terms of being fans of diversity of supply and ability to get gas through the market which the market itself is changing globally that’s an important piece of this we’re happy to be a part of that
With a southern gas Carter but I also think realistically as I talked to our economists in London the idea that Russia is not going to supply a tremendous amount of plurality if you will or at least a I mean never a majority but a plurality of
Gasps to Europe is it’s hard to imagine that’s going to be the case that they would not provide that but if there is a diversity of supply then we should be in a place similar to the oil market where people are less concerned about that percentage I always like to
Use an example of I end up going to the same gas station pretty much every day I mean every time I go about 90 percent of the time but no one says that that is a BP by the way just so people know but it’s it’s right in the neighborhood it’s
It’s not my fault it’s not my fault and I don’t get a gas card which I must admit I was a little disappointed by but I but you know three blocks down the road is another gas station if they start to take actions to be difficult to
Right raise their prices I’m gonna go somewhere else just because I use that 90 percent of the time doesn’t mean that I am dependent upon it so I think we have to be very careful about understanding what is what penetration numbers what market numbers versus what
Is the dependency so I think to me that is something that goes back to that point of diversification of energy supply is something we should all be looking for and that integration of the networks are key to being able to enable that so I really think that that what
We’re looking here is no one country can adversely affect the price we’re very happy to be part of that and look Europe I think is taking on this challenge and has done a pretty good job I think is the point was made the regulatory environment if actually looked at if
Actually put into place is something that is coming to fruition and making and and being a huge part of broadening energy security within Europe we are really happy to be a part of it and frankly that is I mean I can go into more details about you you see the map I
Think we kind of have it says Poseidon but it’s sort of along that line there I will close and just say that we are really excited to be a part of something that is a strategic importance we believe to both Europe and Caspian and knitting those two regions together we
Far – I think when I went to Azerbaijan for the first time it was clear this is that they appreciate being seen as the furthest east of Europe and the furthest west of Asia and to some extent it’s a great location to be in for them and how
They envision themselves and making that link so that Azerbaijan can look both towards Europe and obviously it has always been an important link looking towards Asia as well we’re happy to help be a part of the linking back through to Western Europe and I hope that that we
As along with other people can be a part of providing that diversity and that energy security in Europe thanks Bob turn the floor over now to – Benjamin Smith – to talk thank you and thanks to Glen margarita and others for for having me back to Washington a it’s
Great to see so many familiar faces and talk about some some topics that are near and dear to my heart European energy security that’s really so fundamental to the national security of the United States partners and allies in the transatlantic community I’m currently at Harvard University where I’m working at the harvard-smithsonian
Center for Astrophysics following my four-year stent stint as the European energy security adviser at the US Department of State working with among others ambassador Mary Warlick who’s in the audience today so it’s great to see everyone here where I focused on the sort of energy diversification and in
Policies that are needed and continue to be needed for for Europe to become more resilient to Russian malign energy activities and projects that are focused on it as a region but for just a second I want to talk since Glenn mentioned this earlier I just we just got back
From from Antarctica and particularly the South Pole where I’m working with a team to develop a class of millimeter wavelength telescopes for looking at the oldest light in the universe the cosmic microwave background so we’re course not going to talk about the physics of that today
But I want to set that up because you know I’m I’m here speaking my private capacity but I do want to say when I went down to Antarctica I thought okay I’ve been focused so so heavily on on the day-to-day politics of European energy security for the past you know
Four plus years this will be a real respite for at least a month to be on ice and and and really have limited communication so to kind of take a respite from that topic and I did but I got back and just on Friday I had
Forward to me a article in SNP Platts that reported that Russia’s state geological surveyor shot 4400 kilometers of new subsea seismic in the riser Larsen sea off the coast of Antarctica as Queen Maud land and when they said that they’re assessing the offshore oil and gas potential of the region so of
Course that stands in juxtaposition to the environmental protocol of the anarchic treaty system that was passed and ratified among others in 1990s by the US China Russia and many European countries and other global partners it includes article 7 that prohibits all activities related to an Arctic mineral resource speculation except for
Scientific research so this is going to merit in the following weeks and months you know watching what happens in that space and you know from this perspective Isis thought it was ironic that even if I was trying to take a respite from the geopolitics of energy in Eurasia while I
Was in Antarctica and Arctic ice somehow is it’s still being touched by the geopolitics of energy so turning to the focus today’s conference it’s been made clear today that the actions of the Russian Federation and gas problem in particular in the European gas sector had been focused on two main projects
Those are the 55 billion cubic metre Nord Stream 2 and the 2 15.75 BC ma Turk stream pipelines the first of course we heard earlier was dedicated to the Turkish domestic market the second allocated for onward transit to Europe via Bulgaria and onward and they would provide the Kremlin with the technical
Capability to make good on its long-standing and publicly acknowledged policy objective of ending or significantly reducing gas transit via Ukraine and so I was asked today to talk about some of the impacts that this project would have on Ukraine in particular at this really critical juncture as we got through the the new
Gas contract at the start of this year so despite claims by gas prom that these projects are aimed at bringing significant new gas volumes to Western Europe to quote fill in for an emerging gas consumption gap because of declines and groaning in there you know the the the design of these projects actually
Portrays that narrative the onshore extension of Nord Stream 2 which is named Eagle is principally directed eastward toward the Czech Republic and route 2 om V’s gas distribution hub at Baumgarten Austria which is a de facto end of the current Ukrainian gas transit route from Russia to Europe so only
Under 20% of the project’s capacity is actually allocated for direct delivery westward well the remaining majority is aimed at replacing volumes currently transiting Ukraine likewise and this is happening right now in real time the two trunk lines of the Turk stream pipeline are aimed at a few things maintaining
Russia’s gas position in Turkey which it’s somewhat unclear it looks like they’re still reducing their overall gas consumption dependency on Russia with LNG for example and also in the Balkan region would crowd out global gas competitors and in great competition for for example the southern gas corridor
And global LNG strippers in the region at the same time reducing the volumes that these regions currently receive via the Ukrainian GTS cans for transmission system and onwards through the trans Balkan line so we can kind of do this as a test example what happens so so the
Two lines are currently online as of January 1st of this year and following the beginning of operations of Turks stream the firaon the first the project has already had impacts on both Ukraine and the Balkan EU member states if you look at a ICIS report that came out in
January and its continued to today starting on January 1st Bulgaria is TSO bulghur trans gas reported that the initiation of gas operations for extreme basically had imports from Turkey being at 10m cm per day with the flows by Ukraine to Bulgaria Greece and Turkey completely diverted to Turks
Stream from the Ukrainian gts route like why is the amount of gas that’s entering Romania from Ukraine has significantly decreased to about 15 percent of where it was in December it’s a concerning trend but with conspiracy and ignored stream to the development of which is currently stopped owing to US sanctions actions
That were deployed in December the direct impact on Ukraine is for now blunted since the Nord Stream to pipeline would allow Moscow to divert almost four times the volume of the second line of Turks stream from the Ukrainian route so well where is it’s it’s somewhat in vogue to say you know
Everyone’s talking about Nord Stream too but the real threat is Turks stream there’s no question that Turkish streams of thread the fact of the matter is that if you combine these two pipelines it will not only be impactful as it already is on Ukraine it’ll be a disaster that’s
That’s really what we’re we’re looking at in the current state of play in perhaps more worrying is the impact on Ukraine’s national security itself in addition to loss of transit revenues and impact on its the economy and GDP in the short term the current gas transit agreement between NAFTA gas and gas from
That was extended at the start of this year and it verted a potential gas prices I think most the people in this room saw coming unless there were some sort of action to to help that not be the case the the the dependency that Russia has on the pipeline infrastructure the actual physical
Infrastructure to get its gas to market via Ukraine continues to have that dependence on gas pipelines that are physically adjacent to the line of contact and dom vos and especially in the context of last week’s military escalation by russian forces against ukrainian positions along the line of contact the potential security knock-on
Effects of Nord Stream 2 is worrisome to say the least so if there’s no dependency that the Russian Federation has on that physical infrastructure that’s that’s actually near where the current fighting is in eastern Ukraine it really raises questions and you know is there one less strategic
You know break on further aggression in that region and we should also look at the impact on the transatlantic community because this is not quote just a commercial deal this is a project and a set of projects if you include Turks stream for Russian strategic corruption
And malign influence to be to be pushed into into the West for example at the time of Nord Stream 2’s announcement in 2015 several of the European then shareholders including om foul and BASF finish all signed lucrative asset swap agreements with gas prom for gas production rights upstream in the Russian Federation
And they had been previously been put on hold for a very short period of time following Russia’s illegal annexation of Crimea and aggression in eastern Ukraine at the same time if you want to say like what’s Moscow in it for a hard-hitting 2018 spare Bank analysis revealed that
Gas Proms investments in projects like Nordstrom – and Turks stream are in fact significantly quote value destructive for its shareholders and analyzed and these numbers are incredible analyzed that it would take Nordstrom to at least 20 years to break even and become profitable in Turks stream forty-seven years
Think about that 47 years from today – you know six weeks for for the first profits they actually come back to back to gas prom for that and it’s its shareholders so instead of normal commercial –’tis these projects are used as a means of enriching contractors
Is as me cheb said with close ties to Russian President Vladimir Putin some of which are already targeted under the US sanctions program such as Gannett timchenko and Arkady Rotenberg but it really doesn’t stop there so Moscow’s use of geopolitical projects like Nordstrom – and Turks stream are also a
Means of channeling benefits to favored Russian oligarchs and it’s not limited to domestic allies it includes of course the notoriously German Chancellor Gerhard schröder who advocated for the first Nord Stream pipeline while in office and then was appointed chairman of North stream AG shortly after leaving
Of course some folks say that he’s the most effective Trojan horse for Putin in Europe but it’s to me a little bit you know doesn’t quite make sense because that would be saying that the Greek army has kind of just rolled in without a horse built around it’s pretty obvious what’s going on
So yeah exactly it’s not not that uh yeah not that big of a surprise and over the past few years this Schroeder is Asian as the term is kind of grown in the past few years has continued for example former Austrian Chancellor Christian Caron penned a strong letter
Then co-authored by at the time the German Foreign Minister de Sigmar Gabriel that decried the 2017 countering America’s adversaries through sanctions Act or CATSA he did that was appointed to the board of Kremlin controlled Russian Railways last year while former econ Minister Hans York shelling left office after advocating for Nordstrom to
And is now an advisor at Nordstrom AG so for just a second imagine if President George W Bush or President Barack Obama were currently working on behalf of China’s Huawei just imagine that take a moment imagine that it wouldn’t just be us story in Washington it’d be the only
Story ok it’d be the only thing we’re talking about unfortunately that is not the case in Europe and and for some reason the electorate in some European nations seems to have accepted this Schroeder i’s status quo and therefore there’s little political motivation for former senior officials to resist becoming well compensated conduits of
Russian malign influence through these infrastructure proposals so if there’s any hope if I just leave with with one thing before we move back to the Balkans and and I close up there’s any hope of reversing this this trend of Russian wine energy influenced a more frank public discourse on these trends really
Seems to be merited both in Washington and across across the Atlantic with our European allies and partners so what can we do so that’s kind of a state of play what can we do what can be done to counter these physical embodiments of that that hybrid campaign from from
Moscow I wrote an article about this I continue to hold that I think a US EU cooperative double play is merited and should continue to be to be pushed for in this to face this issue said so over the fast past three months on the US
Side the US has already led off with two major actions the first was a limited technology calibrated sanctions action that was contained at the 2020 National Defense Authorization Act which targeted vessels in technologies facilitating the Nord Stream 2 pipeline and an actually Turk stream as well unfortunately Turk stream
Was already completed by the time this was passed so it didn’t have a direct impact on the offshore event and then actually stopped the physical deployment of North stream to sanctions were long in the making but they were enacted rapidly in December so that it’s at nordstrom AG could not finish the last
20% of his deployment on December 11th the House passed the NDAA 17th of December the Senate and then both after you know being both passed by an overwhelming bipartisan majority the White House had a signing ceremony at Joint Base Andrews on December 21st and it was it was pretty interesting to see
In a fairly dramatic you know a lot of these you know energy projects that we’ve been talking about for years and years and years have really kind of a slow burn about things going on but in in a real time scene just minutes before the signing took place dramatically the
Principal nordstrom to pipeline vessel owned and operated by by swiss firm all seas suspended spite deployment and rapidly exited the Baltic Sea in the following days and it was followed by many on line on you know a maritime I think it’s marine traffic maritime traffic the ship trapping website so
It’s something in foreign policy you don’t see that often at least in the geopolitics of energy of something happening that that rapidly so in this in the interim period the last two months part of what I was in Antarctica and since I’ve been back gas problems made no progress in advancing the
Project but it would be untrue to say that the threats gone and it’s entirely impossible for Moscow to complete Nord Stream 2 although the difficulty is significantly heightened and there will be significant delays it’s clear from statements from the head of Russia’s United shipbuilding corporation that
That were made back in December it could take up to you know between four and six years for Russian industry develop build and deploy a specialized pipe later pipe layer of the scale and sophistication with with real-time directional positioning as all C’s pioneering spirit that had
Left the project so there is this ship academic cherski who is apparently on its way to the Baltic Sea we’ll see what happens with that it does not have the right the the right dynamic positioning systems and ROV etc the technology that was permitted under the Danish permitting process that ended in October
So I think that will continue to take quite a while for Denmark to either review the permit update the permit do that sort of thing so there’s there’s some time and it won’t just go ahead as is without having these technologies because as as margherita wrote in her article recently there are large-scale
Chemical and conventional munitions in munitions dumping sites from world war ii and and the soviet era in that region that you just can’t put anchors out on the seabed so it’s it’s something that we need to keep watching it’s watching during that period the same time the United States should continue to ensure
That they’re already enacted sanctions that were passed under the NDA are fully enforced and continuously monitored to maximize the potential that the project is not physically completed in the near term which gets us to the second part of the double play what Europe can do to to basically stop this project from having
A you know significantly negative impact on Europe that’s because updates the EU gas directive that were completed in spring 2019 under which Nord Stream 2 will still face significant regulatory challenges even if it’s ultimately completed since the project would then be subject to the full force of the gas
Market liberalisation statutes of the package including ownership unbundling and third party axes which gas problem is of course reticent to do and this is especially due to article 11 of the gas directive which I wrote about last fall which will require the National regulatory authority of the host member
State in this case Germany’s Bundestag and tor to decide or with potentially withhold certification for a project if it harms the security of supply of other member states of the EU or the EU as a whole and I think that everyone here today can see that Nordstrom did too
At least has some impact if not significantly does that european extension of turk stream is right in the same vein would of course have to undergo similar permitting by bulk or trans gas and thus its onshore business model is challenged due to the good work of the EU market liberalisation process
That’s been underway since the European energy Union was established in in 2015 there are challenges of this going on right now and something I just want to make a quick note of before wrapping up is that there are the supporters of a knurled stream to are still trying to
Get out of having the third energy package be fully deployed one of the things that came out in German press in November 2019 the Bundestag passed legislation that adopted the gas directive in such a manner it could be potentially used to facilitate arguments that Nord Stream AG’s bid to circumvent
The third energy package could be successful by challenging the commonplace definition of quote completed energy infrastructure handles bought at the time described a legal loophole inserted in the legislation that the Buddhists not soccent or and of course this is this goes for vulgar trans gas as well if it goes that way
In Bulgaria it could possibly take into account quote that the project company already made billions in investment by May 23rd 2019 and had relocated a considerable part of the management this would facilitate a line of argumentation that although the pipeline was not physically completed did not hold all the necessary construction permits was
Not operationally capable of conveying natural gas as long as extent somehow would be quote completed by virtue of Finance of financial investments made furthermore German media also over the past few months also described what Nordstrom AG is trying to do to get out of the full impact of the law that
Scheme would involve creating a shell company under which gas prompt could sell the last 12 nautical miles of the pipeline as it enters the German territorial sea to avoid having to comply with ownership unbundling requirements in this scenario gas Fromme would be the sole owner operator for the
Remaining more than 90 percent of the pipeline through the Baltic Sea allowing gas for him to argue essentially that the gas off take point could simply be on the baltic sea bed at the boundary of the german exclusive economic zone this is despite the fact that physically the
Pipelines or pipelines are still ones continuously operating infrastructure installation so both of these interpretations require legal fictions which i say are legal fictions that that are taking a bit too far that really need to be you know looked after in brussels and and in other member states to make sure that
Everything if nordstrom to has ever somehow completed physically that that this is this is fully under EU law so to wrap up i want to say there are there are reasons to be optimistic here especially in the balkan region where there has been a lot of of really great
Developments that are exciting for me having looked at the space and and visited in particular greece quite a bit during my time at state bulgaria has long been nearly fully dependent on Russian gas now has the opportunity to choose to reduce this dependency given a few of these projects that are starting
To come online over the past few years Greece has upgraded the LNG import capacity of the terminal at the port of RevoluSun near Athens and it’s also increased the cross-border physical interconnection capacity on the Greek Bulgarian border at the culatta sideral Castro crossing this allowed for the
Ability of Bulgaria for the first time in history to import LNG directly from the global gas market including a cargo from us sources for the first time second in May of last year the long-planned interconnector greece bulgaria igb began its construction phase and hopefully will be done by the
End of this year and then can get gas from the southern gas corridor from the shock Deniz fields running from Como teeny Greece to start a Stara Zagora Bulgaria at the same time that this has happened the EU continues to support projects of common interest through its connecting Europe facility along NATO’s
Eastern flank including the Norway Denmark Poland Baltic pipe and the gas interconnector Poland Lithuania which are both vital projects to enable Warsaw to basically realize its vision of diversification away from Russian energy dependence in the next few years and to bolster this effort bipartisan support from US Congress allowed the US International Development
Finance Corporation to dedicate just two weeks ago up to a billion dollars to support infrastructure proposals including energy in the three seas region so in closing by not only opposing Russian blind energy activities and projects that would undermine Europe’s energy security through things like sanctions and and opposition to
Nordstrom – and Turks stream it’s also offering substantial financial assistance to help nations in Europe complete long-planned energy diversification projects and it’s provided strong evidence here in Washington that the United States is really committed to supporting the national security interests of European partners and allies rather than motivated by this sort of mercantilist
Desire to simply quote sell more US LNG abroad that gas prominence allies have alleged falsely for for some time so I really just want to end there and thanks again for having me down to Washington and look forward to the discussion Thanks Thanks so they actually one point I
Think we’ll want to come back to is the point that you made about under the new law that sets up the Development Finance Corporation the ability to finance energy projects in the three C’s area one of the things which during my time in the energy Bureau is its State
Department and and later there was sort of a problem where some of the restrictions on what is the US could do to actually help finance these projects yeah let me turn over the floor now to our from atif who is a senior fellow with the Middle East Institute and also
Formally has held a number of senior positions in sokar the Azerbaijani State Oil Company and including their office here in Washington so one quick note about Ben’s comments about the academic chair ski it does have TP but dynamic positioning but it doesn’t have I agree that it doesn’t have all the other
Equipment required for doing the job in politics see it’s on its way it’s it’s actually going to be in Colombo Sri Lanka probably tomorrow so let’s see where it goes when it comes to the Balkans and LNG dynamics there I’ll I’ll just start talking about the challenges that the
Balkans had when the Russia Ukraine gas dispute happened and what has changed and what you expect in the future so the reason because I’m talking about the gaseous produce I think that that was the game changer for the whole Europe where Europe decided to an incorporation with the United States take this energy
Security issue more seriously than it was before so what we had in our hands when the crisis happened we had lack of interconnecting infrastructure in Balkans we had a lack of harmonized legislative framework the consumption levels of gas is incredibly low compared to other parts of the Europe because of
Indigenous call mainly and of course given that the consumption and energy production was coming mainly from coal it was it was difficult for gas to compete with it and then there was some other specific problems such as gas Proms pipeline gas of course it wasn’t cheaper pipeline gas as it was mentioned
Today actually belkin’s paid more than anyone in the in the region and i think the average price was thirty percent more than other other parts of europe however it’s a pipeline gas and as mr. chair mentioned the importance of the infrastructure is is key here and they had the infrastructure which was
Supplying gas to this part of the world and then there was gas Proms don’t see these are all the gas form subsidiaries in the balcan countries you can see the list there it’s in every single country and in most of these countries they actually own the main
TCOs I mean have their shares in the main TCOs so that was the main obstacle for the Balkans to to become a major gas hub and then to become an LNG hub so what changed what changed was the the global in this changed the technology the advent of LNG
Technology has led to the education of the constraints which were specific to the gas industry gas has been started being transported through with the with with the tankers which was a game-changer for the industry and other changes was of course again the improvement of technology which led to
The US shale gas and US has become one of the largest producers of the gas in the world and that meant also more supply to the world market and specifically energy technology the next stage was the floating regulation use and it’s FPSOs which are gave more logistical solutions for the LNG
Suppliers and the gas suppliers to reach its customers originally were happening in Balkans there was more pipeline infrastructure encouraged by the EU it was mentioned here the projects of common interest encourage more projects and there was also pipeline projects coming into the region from outside soldering gas quarter was mentioned here
And then Turk stem pipeline from Russia so more infrastructure more interconnectors and there was regional developments there were gas discovered in in in in jason territories in neighborhood namely in east met which was traditionally the importer of gas so we have the the pipelines mentioned here both interconnectors and the main trunk
Pipelines that come from the from east and what implications it has for the market again market globally has become more abundant which has been the case for last two or three years more gas meant also the shift from the long term oil linked contracts to more spot based
Methods or formats also the EU use third energy package and use efforts to to increase the infrastructure at the same time – to create more agility in the region led to the more pipeline interconnectors and as well as reverse flows closes which led the countries to export an import the pipe
The gas another luteum development was the more LNG infrastructure not imbalance namely because there we still don’t have any LNG terminal in in imbalance it’s more like in southeastern Europe parts mainly in Greece and Turkey but again this LNG terminals namely the FS are use have become more instrumental
To bring in more gas to the region and making the the region itself as diversified and abundant with the gas so this is are the two keys two FS are used that they have all right at the moment as a result of this turkey actually became the second largest importer of of
LNG in Europe and and seventh in the world and as was mentioned here last year in the first nine month actually turkey imported as much as gas via LNG as from Russia which was a great achievement for Turkey the one of the FS are use are in hot I which is Turkey
Bordering Syria another one is alia where my previous company has refinery and there there is a fpso and FS are you standing there which actually led to turkey becoming important LNG importer in the in the region and the world and then when Greece has it was mentioned in the
Gravitas of LNG terminal and there is another one in history actually to be built at Alexandra Palace which Bulgaria has shown interest to acquire 20% of and but there are still problems there are still challenges and then the challenge is is that most of these pipeline projects that has been started or has
Has done has been done a fuse ability study they haven’t progressed as fast as we’ve seen in Nordstrom or Turk streams case which was meteoric speed so what are the situation what are the status of affairs in respect to these pipelines brewer gas pipeline is under construction I think I’m
Optimistic here if I say that half of the pipeline has been built I think 2/3 hasn’t been built yet the real number the actual number is Bulgaria Greece interconnector this probably is the 42 kilometers it has been built and 100 left still under construction Eastern pipeline I think no tangible
Progress has been made there it’s just a pipeline dream at this moment and then I a peak as pipeline that they’re just completed they the design of the pipeline stage but the actual construction hasn’t started in terms of the LNG terminals we have Croatia has been building this Kirk Island terminal
Forever there were some financial issues commercial issues then you know the state company to take the project on its shoulders now it’s still under construction hasn’t been built yet I mentioned the Alexandra plus FS are you the Greece they have they’re doing the market tests they’re receiving bid
Fittings at the moment and one new one actually very exciting one is Montenegro’s just proposed by LNG terminal this is also going to be FS re I think that’s in a deep water port of Montenegro so this is the overall situation what we’re having now in the
In the Balkans what what why my real concern with the Balkans is I’m optimistic that there are there are more imports coming more LNG coming to the region which means you know diversification which means cheaper gas but the problem is that none of these projects special day LNG projects were
Completed during the when the prices were super high compared to what we’re saying right now when the jkm prices Far East Asian market prices were around 16 MBTU which is around five or six right now so I think if if these projects were completed by this time Balkans would
Have more competitive edge over other terminals now that prices have gone below three dollars and we don’t and there there is a forecast that the the abundance in the market dealing G the prices might remain like this with the with the virus going on in China and China and Japan being
The largest importer of the LNG almost 80% of the then we might have issues the Balkans could have catch the LNG train but I think they have missed it for now thank you trying to maybe pull some of us together and get a discussion going here among people on the panel and I
Think a few should have brought a key point up towards the end here because as as Bob said at the beginning diversity is essential for energy security adversity supply diversity of sources diversity of types but one of the other realities is that there are market forces involved in the past when the
United States and UK and others for example worked on things like the contract of the century or the southern gas corridor prices were in a certain place when we go back to contract of the century even in southern gas quarter there was thinking about peak oil which
Is now a charmingly archaic notion sort of back there with horses and buggies or something but the markets changed the technology changed and so I’d like to throw out to the panel is how do you see I mean we’ve talked a lot you know in the first panel and the discussion so
Far about the geopolitics and the geopolitics have a key role here because certainly the it’s a factor as is noted you don’t I don’t think any I’m looking at some reps here from companies I don’t think any of you be you know get you far were your board if you were suggesting
We have a project that’s going to take 47 years to get a return on but how do you see the market outlook which again is you know certain changes in terms of demand in Europe but also changes in demand globally Europe may be staying steady but Asia rising dramatically right now discussion about
Large supplies of gas from the U because of the US Australia others come mozambique coming online but it takes a while to build a pipeline it takes a while to be looking at some of these things in some ways you’d a longer-term view how do you guys see the market sort
Of entering into this equation I’m not an economist but I think obviously all of those factors play in I mean I have to say I was struck by the idea that while representing an energy company I think we we generally would rather not have a low price for our commodity on
The other hand as a consumer I think it’s good to have a low price right just just checking you know I mean yeah you know how horrible is it the countries in Europe want to have the cheapest gas available to them I think that’s something that we have to consider as we
I say it flippantly on the other hand I think it’s something has to be considered because it’s very hard to look at a country and say don’t get cheap gas because it’s not in your interests whereas I think many of them are going to say it absolutely is in our
Interest to get the cheapest gas possible it’s good for my industry you guys are having cheap gas I have to compete with your industry why should I have to pay a premium for my gas because you tell me it’s an interesting discussion to have it’s one I’m glad I
Don’t have to I think there’s an argument for that discussion but that’s also something that from market forces is difficult I do think what’s interesting is to look at I think natural gas is going to be we believe natural gas is going to be more important to the global economy it is a
Crucial piece of getting towards a lower carbon emissions future it is not the end piece of it it is absolutely a key piece especially if you can imagine the drop in carbon emissions you would have from switching from coal to gas on a routine basis throughout Asia that would have a huge
Impact and is probably something that we would all want to see so I think we still see there’s a great future for that what of course is interesting is as you can imagine natural gas becoming a more commoditized more on the spot market sort of a commodity how do you
Look to put huge investments into infrastructure it’s a very it’s a tough piece to square if you’re looking to be driven by market forces and not other forces so I think that’s going to continue to be a concern and an issue but I don’t see any I see the near-term
To medium-term future of natural gas is very good and is very positive because of its lower carbon emissions assuming that we can make sure to maintain and track methane emissions as part of that process and I just that’s that’s a fantastic overview and I think just to add you
Mentioned market forces versus other forces that’s absolutely true it’s it’s you know certain calculations will go into these large-scale infrastructure projects from you know a commercial company like BP or others in the global market when we look at command economy authoritarian state-owned enterprise companies like you know like those in
The Russian Federation they don’t operate on the same market driven forces mentality that that a lot of these other companies do that’s why you’ll see them do things like this which I thought just absolutely bizarre to see them doing seismic exploration off the coast of Antarctica there’s absolutely no market
Forces that are driving that right now especially because the leonardo treaty would only even if it was if it was let to expire wouldn’t expire till 2048 it can’t be done until then likewise with some of Russia’s activities in the global far north in the Far you know the
Arctic around the transatlantic Arctic and and also some of the the work and energy speculation that China is doing it’s on a completely different scale and being driven by much more strategic either in the case of Russia you know spreading to strategic corruption in some of these cases
Through projects like Nordstrom – and Turks stream or just for you know strategic posturing for the future it’s not coupled to normal market forces I agree with everything been said and mentioned what I think the main question here is how will the market behave yes gas market is becoming more globalised
But does abundance in the market means that prices will be lower than $3 which we’re experiencing now will there be grouping as as we see in in the oil market right now as OPEC plus cartel actually just a note Russia is is very active in both of these cartels both in
Gas exporting countries forum and and in OPEC plus so that will be probably the significant factor in defining that but overall as I mentioned with the improvement of technology with the illumination of the other constraints that we used to have with the pipeline gas the country is dependent on single
Source will have more than one source and to import I think that’s that’s more important that will actually decrease their vulnerability in face of geopolitical risks I could add even if those facilities aren’t used 100% they create an incentive a they create the conditions by which everyone understands
That there is always an alternative and and I think more looking at that is something that’s good an important part of the infrastructure if I could ask one other question before we open up to the floor in the past the United States has played an important role somebody would
Say driving role in some of these projects in helping you know create things like that southern gas corridor and so forth it’s been involved actually I mean my colleagues when I was at the Energy Bureau were involved in discussions with Turkey and Israel and others in the east regarding the eastern
Mediterranean looking at the today looking at the eighth you know situation in Washington today looking at the situation Brussels today looking at the situation and in the capitals of the Balkans as well as in the Caspian region what kind of role if any do you think is
Advisable for the United States to sort of play or for other outside powers to play in terms of diplomacy or engaging in helping foster projects I think up until now United States strategy has been coherent enough in respect to the EU energy security actually my opinion United States has been more concerned
About Europe’s energy security than Europe itself for obvious reasons because Europe is not monolithic I think continuing this this strategy would be important I do believe that at the end of the day the commerciality of the projects dictate the the success I mean in the free world and we have seen we’ve
Heard that some some rate of returns are for will be in next 47 years that doesn’t concern them but in a free world with the commercial t of the projects dictate the success of it and with the political support it will be of course easier to implement these projects I’ve
Seen that working for for the BTC pipeline and for the southern gas corridor it’s crucially important to have that support but at the end of the day the 45 billion dollar decisions are made in the boardrooms so the commonality is equally important yeah I’d like to add I mean think about it
For all of the apparent foreign policy transatlantic security discount Muniz that we’ve seen and and to some extent evolving over the past several years the one area among maybe a few others but certainly the one area that’s been core to this transatlantic security cooperation that’s been extremely continuous has been the United States
Support of European energy security under the Obama administration under the Trump administration from Democrats to Republicans on Capitol Hill legislation keeps coming out and diplomatic work and and and you know funding packages and sanctions packages etc keep coming out to support the core tenants of European
Energy security in the face of you know Russian malign energy activities and I think thank god that’s the case because the national security of our partners and allies would be degraded significantly were it not so I think the best thing that we can do going forward
Is to use these new tools in particular this this new funding mechanism to help bootstrap some of our diplomacy and help get some of these projects over the finish line that we’ve been engaging on diplomatically from the United States and working with our partners in Brussels and within Member States for
Many years and we’re close on a lot of them and I think a billion dollars will go a long way to to help that so the US should keep an eye on how can we best allocate those resources and put together a kind of resource allocated approach to make sure that those get
Done and help our security collectively sooner rather than later thanks questions from the floor thank you very much this was excellent this is an excellent panel I have one quick question and the other one is about storage facilities in the Balkans row of what is and and ambassador share
What would be the available gas from the Sun and gas corridor to the Balkans right now we have a contract so Kirk has a contract with Bulgaria for 1b cm and with Greece for 1b cm how much would be available in the future and when and the
Second is talking about Balkan gas hob to be a trade platform you can’t have a trade platform without storage facilities and the Balkans have been particularly Macedonia normal Cydonia Bosnia and Bulgaria most vulnerable to Russian gas interruptions precisely because they lacked gas storage facilities Bulgaria has half a BCM
Storage facility will be expanded to 1 B cm but is that enough for a trade platform and what is the future thank you the quick version obviously you wonder Bulgaria 1 degrees that’s what’s contracted for the for the next 25 years we will see certainly we continue to explore with sokar in the
Caspian for other gas resources there is capacity in the pipeline depending on you know compression etc there are other sources that you can imagine within the Caspian that might be able to be tapped into so we’re always interested in that if they are commercially viable but
Right now you know we I can’t tell you when that’s coming online or how that’s moving forward because we just don’t know we just don’t have that now the one thing I will say it’s funny that you mentioned the hubs it’s it seems as if every country I hear about now wants to
Be a hub for natural gas and I and and and and and by definition I’m I don’t think everyone can or else no one is so it will be interesting to see how that plays out and obviously storages go you know whoever has the storage at some
Point or the lines or the LNG you know it will be interesting to see how this emerges but I I it’s it’s an encouraging sign but a you know a discouraging prospect that everyone thinks they can be the hub yet fall on that on the first point of
Course it will be the amount of gas to be supplied from Caspian will depend on how fast shorten is 2 and then Karabakh and Nakhchivan fields are being developed enough Sharon field is being developed as far as the second point concerns I completely agree with you and not only storage but also the
Liberalized market is another caveat for for for the for becoming a hub just having a gas and that’s actually being said about Turkey and Greece as well just to put it in context turkeys gas storage is almost probably less than Azerbaijan’s gas storage for a country
Like that to have 5 billion cubic meters gas storage is it’s unbelievable and and then to have them the ambition to claim that you were becoming a gas hub is is is delusional it is becoming a gas transit country but it’s not becoming it gas hub and that applies to all these
Other countries as well as my colleague machine here so that’s these are two most important factors in Turkey has done a lot of work in liberalizing its market but it still has a way to go and they have colossal plans to expand and they do have potential eventually to do
So with the salt caves and I think coal caves as well but nothing tangible has been done so far so that’s those are the main major impediments that’s really interesting because every one of the countries that is always talking about being a hub and there’s engaged I think
With the United States very actively in the sort of I want to be a hub policy has been Turkey and it’s sort of the justification the turkey has given for certain things including some of the the flows of gas coming from from the north can we talk a little bit more though
About Eastern Med I mean do you see that sort of entering into this this at all I think it will I mean I think have to see obviously there I mean shockingly their their geopolitical issues around that one as well yeah which and I know it’ll be upsetting
That it’s only Turkey and Greece but and others who we’re helping but I think anytime you find that the reefs or if it’s commercially you know easy to get to and there’s a resource then it can easily displace things that are less commercially viable what’s of course
Interesting is that in the region itself you’ve got huge potential users and you have real and Egypt’s facility LNG facilities are really not running at near capacity so I think you know one one would imagine from a strictly commercial perspective that the quickest and best way would be to tie back into
Egypt feel you know Egyptian fields and use the LNG facilities they have there obviously we’ve all heard about pipelines and other ideas I’m know anyone who knows my background knows I’m not an engineer or a geologist or anything else that would allow me to say this with confidence other than I’ve
Listened to other people that looks like it’s hard I think the term I was told by our geologist was really really hard to get a pipeline from the eastern Medici other major sort of consumer so and and it does bring up the second question of so who’s the who’s gonna pay for that
Right in a market that is increasingly global where do you get the money for the infrastructure that creates such a very difficult and long pipeline but hey if it’s there and if people can can organize around it and frankly even seeing from an old geopolitics hand you
Know seeing that Israel gets invited to something in the Arab world even without the United States pushing for it is a pretty interesting and exciting development that really proves that there’s a big resource there because otherwise I suspect that would not have happened hey thank you very much to all
Of you this has been really interesting and I apologize if this was covered in the first panel which I wasn’t able to make but be interested if any of you perhaps Ben or Ralph could talk a little bit more specifically about Turks stream – and the prospects
Of it moving forward I assume that it’s going to need to meet the same competition rules that South Stream did and would be interested in knowing how you see the fate of this moving forward on what kind of a timeline if any of it at all does it make it to Bulgaria in
Fact and beyond be interested in hearing what the real viability of it is from your perspective very specifically for the Western Balkans I think the short answer will be that even Gazprom doesn’t know whether or when Turks tomb will happen I think they are just playing by
Ear right now and also you have to understand that Turks tomb is also element of larger russian-turkish relations which is under stress right now because of Syria and it’s not only interesting – there’s a coup you there is other projects as well so we don’t we
I don’t know it’s it’s a Pandora Box in this stage however there have been signals by Bulgaria mainly you know the eager order they have received or a certain amount they’re eager to receive but then then we’ve seen mixed signals for Bulgaria saying that you know half
Of the the gas import will come from the US LNG of course there are some countries there because of the list of the companies that I mentioned that castrum subsidiaries in these countries they’re more becoming more have become more dependent on Russian support or Russian infrastructure they will have
Less freedom to in their in their in their foreign policy in their decisions but I think the third energy package and its clauses will be instrumental in deciding whether turk streams – has basically South Stream light version South Stream will have future or not so I would I would say that from Gazprom’s
Perspective the second line of Turks stream as it came online just to the over the Bulgarian border and at the you know two months ago the start of this year already is having that impact that the Kremlin wants which is to limit gas transit via Ukraine it’s already as
I said in my open it’s brought the gas transit through the trans Balkan line that was fairly robust up until the end of December down to 15% of its if its capacity for gas that exits Ukraine and enters Romania and all of the gas that was ultimately going to Bulgaria Turkey
Greece from from Russia via Ukraine now is going through the the Turk stream conduit the question of course is then as as you’re asking Mary the onshore portion is going to have real real big questions on its ability to comply with the same sort of rules that Nordstrom –
Potentially will have – and hopefully will have to comply with should it ever be completed which is the updated gas directive and again vulgar trans gas is going to be right in the same boat as the Bundestag on tour in Germany in in how it tries to either a approve the
Pipeline and somehow argue that that this does not have a negative impact on other EU Member States security energy security or on the on the Union as a whole or else say that it’s not certified and then I don’t know I mean obviously what happens in that case if
Bulghur trans gas is is helping to advance the onshore portion and then onwards into you know Serbia and onward so it’s really going to be incumbent on the European Commission in particular DG energy to continue to basically keep the screws on these these – transmission system operators – to play by the rules
Because the Opel decision that we saw last fall where Poland and and Co signatories Lithuania and other a couple of the Baltic states that we’re Co signatories of this this set of legal case case law standard that you can’t just limit your scope of your review of the national security impact energy
Security impact of a pipeline in that case Paul to just the country that it’s in its it’s got a got a look at other neighboring nations in that case Poland so what are the impacts on Romania what are the impacts on Greece that those are the questions that are going to continue
To have to be asked and in the Turks stream case and I don’t know if they can be answered in the positive so it’s really going to be a question if somehow the approvals come in from Berlin and Sofia that well what does the Commission do at that point because there’s already
Case law that that Warsaw has succeeded in in challenging in and beyond so do they open up an e CJ case you know because of that there’s a lot of questions that’s why I think it’s going to be a long time before these come online as full pipelines if they ever
Come online as gas prime originally intended which I hope they don’t hi thanks for being here today Nick cropper from the American security project to what extent do you see Europe’s continued development of renewables diminishing the geostrategic value of Russia’s gas pipelines in the Balkans and how do you see Russia
Responding to that in the long term I’ll just say from a market perspective we’ve you know we fully expect that in the medium term that will the main the main energy source that we would hope is changing especially if we have a limited carbon budget for this world as carbon
Is coal so but renewables at a strong pace or something that I think everyone is supportive of in you obviously we’ve talked about that in the first session that’s an important piece but I think it’s going to be awhile if you look at the penetration of renewables before
They are going to be able to take on a hugely huge significant percentage of the energy production other in from natural gas obviously off into the future I don’t think our modeling suggests there’s no doubt that natural gas will go down as well but there will always be a there’s a likelihood that
Out into 2040 2050 even that there will be a significant amount of natural gas perhaps decarbonized but natural gas is part of the mix in Europe and and elsewhere what I think will be interesting to see is does that put a premium on the lowest cost provider of
Natural gas and we’ve we’ve had that discussion but in many cases that that the lower cost will be piped gas doesn’t matter where’s but I mean it’s always going to be somewhat cheaper than LNG so that will be an interesting sort of evolution to see where the market goes
But there’s no doubt renewables are going to have an increasing effect they’re just so relatively small now that they can increase at an incredibly large clip as they have and we still have a number of decades well where natural gas is still an important few yeah I agree I mean to combat climate
Change we need to get to a point where our technology in terms of renewable technologies and even horizontal technologies as I sometimes talk about as a physicist I hope that eventually we have you know thermonuclear fusion at grid scale that we can do and couple that with grid scale storage and
Existing renewables to get to a point where you know we eliminate carbon emissions but it’s it’s going to be awhile and the nice part about renewables is that it decouples the geopolitics of the resource right the Sun geothermal you know ocean tidal you know tidal currents etc waterfalls it
Takes those away and decouples the resource from the geopolitics however then the technology comes into play so then you’re gonna be talking more about geopolitics of intellectual property associated with advanced renewable technologies or fusion technologies in the decades to come and I hope we’re having that discussion because that
Means that we’ve started to eliminate some of the geopolitical competition and you know strategic corruption and influence that that’s that our resources right now are using but it’s going to be a while so that there is this this bridge period before we can really see what the geopolitical impact is
Specifically for Balkans I think the problem is also the different status of membership at EU that brings also the commitment to the EU regulations I think the main competition in Belton’s should be between renewables and coal because coal is that is the dominant source right now and it’s more detrimental than
Than the gas as far as gas prom concerns Gazprom’s recent activities show that they’re there they’re trying to adapt to the commercial reality they are trying to sell more gas on spot pays to delink because there they see that the reality is that the the market trends are changing so i
Would assume the same approach from them just to try to adapt to the market reality which actually defeats the whole purpose of bringing those countries into dependence into russia because in that case or those countries that it was mentioned before become more independent one thing to my dad honest this point is
That if you look at you know what countries are talking about going to renewables its what your maximum goals are things like 20% that includes hydro now granite the amount of renewables is increasing and should but and it’s china’s the massive increase in the united states there’s a massive increase
In the use of renewables but okay it’s 20 percent that leaves 80 percent one other factor in europe which we haven’t really talked about is the neuralgia regarding nuclear and so as first i austria and germany others pull out of nuclear something’s got to take its place so all these different pieces of
These equations they’re all gonna be working at the same time so yes there’s a you know i see you know rising demand for for renewables but at the same time some sort of hydrocarbon is gonna still be needed in the near future and as bob said you want to use the cleanest that
You can and right now the cleanest of things that you can burn for for for electricity is is gas until we can actually you know move either physical in terms of the physics and in terms of technology but also in terms of the policy into acceptance of nuclear
Shengcún Easter Egg and gas analysis actually I disagree about the inexpensive transportation by pipeline it only works if the pipeline matches the market demand it’s same as if you use 18-wheeler to transport stuff that can be brought by a pickup truck this is the case of Turks team for instance two
Pipelines 31.5 BCM of capacity shipping less than 10 billion cubic meters a year it’s definitely more expensive than any LNG delivered by a tanker of a normal size if they start delivering by 5000 ton tankers they may lose but if they use 20,000 tons they definitely win I’m just certainly
The given that the market of for gas is not a perfect market by any means but if you just go by Henry Hub you know and you assume that Henry Hub is a is a global market price obviously long-term contracts are a lot of other pieces but
LNG is Henry Hub plus right it’s it’s just what it is that it’s it’s and you know why is cutter a terrific place to have natural gas because it’s plus for LNG is the same to go to your position station every contract has its own price formula right but you are right in
Specific I I think in general as this market becomes a little more you know global I’m gonna I’m gonna stick to it cost more because you’re gonna have to ship it but it’s a it’s a fair point it is more complicated than that right and there’s another interesting observation
For instance in the first 50 plus days of 2020 the power generation wind power generation of Germany exceeded the combined power generated by coal gas and whatever in a coal Colin gets definitely and nuclear corrects right but the wind power definitely taken over in Germany is the number one component in the
Energy basket unfortunately I’m sorry unfortunately Germany is not the benchmark for all Europe Germany has has been in leading positions in renewables even George is having trouble now placing new windmills and so forth it gets more complex but Germany’s the history is also a little different given I will say I have a
Really cool app that tells me in like in New England and in California and there may be others sort of what percentage is by renewables what percentage is about you know so you could see what it is there’s no doubt it is growing at a tremendous rate and and faster than the
Penetration of any other energy source that we have seen in history but it’s four percent now so it can continue to grow and should continue to grow faster than any other than the adaptation of any other new source of energy but we still have some time before that means
That outside of Germany perhaps that it’s going to be you know we’re gonna need that we’re gonna be able to not burn any hydrocarbons and I would add just quickly on your first point on turk stream it seems like a very large sunk cost for the both the technical rigor of
The type of pipeline being really deep sea and and the you know compared to the the percentage of the the volume of gas that’s being conveyed and only to remove gas that’s already going through existing pipelines in ukraine so i again do not see that as a commercial project
In any way shape or form it’s a strategic project on behalf of the kremlin but of course we can all come back in 2067 and find out if we were wrong because that that’s the day that the gas problem can you know get its first profit paycheck sent to Moscow
So if anyone here is around just hang on to see that we’ll be able to prove that’s right around I can tell you I won’t be here thank wait so I think on that note it probably is our last our last question thank you all very much anything good you want to
Say something thank you everyone for coming today and I’d like to thank Margaery ascend fo for putting this wonderful event together and give her a big round of applause and thank you [Applause] we’ll have the event posted online in a couple days so be sure to visit Jamestown again and look forward to
Seeing you again in another another future event thank you