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Russia Is Slowly Turning The NatGas Tap Off To Europe

Tyler Durden's picture




 

While Naftogaz (Ukraine's gas pipeline operator) states that all gas transportation from Russia to Europe is running normally, Bloomberg reports that Russian natgas exports to Europe are declining. Shipments are down over 4% from the prior week and also lower to Ukraine. This 'adjustment' follows increased sanctions by the West as Medvedev's notable statement this morning that Ukraine owes Russia $16bn.

NatGas output is tumbling

The good news:

Gazprom today said natgas transit to Europe via Ukraine, supplies for Ukrainian consumption  

But Pay Up...

Ukraine owes Russia $11b after collapse of 2010 deal, Russian Prime Minsiter Dmitry Medvedev says to President Vladimir Putin at Security Council meeting, according to transcript on Kremlin website.

 

Medvedev adds $3b Ukraine bonds bought in Dec., ~$2b debt to Gazprom for natgas supplies

 

NOTE: In 2010, Russia agreed to sell natgas at discount in exchange for extending lease to Black Sea naval port of Sevastopol in Crimea to 2042 from 2017

Or Else...

Russian natgas exports to Europe and Turkey, excl. former Soviet Union, declined to 405.3mcm as of March 22,  according to Bloomberg calculations based on preliminary data from Energy Ministry’s CDU-TEK unit.

 

Avg daily exports to region were ~457mcm in March, lower than yr earlier: calculations based on CDU-TEK data

 

Shipments March 16-22 were 3.04bcm, 4% decrease vs level in week ended March 15

It is too early to see a trend, but for now, the direction is not hopeful for Europe.

Furthermore, Gazprom has cut its Diesel output by the most in 7 months...

 

and then... (via NY Times),

Russia is now asking close to $500 for 1,000 cubic meters of gas, the standard unit for gas trade in Europe, which is a price about a third higher than what Russia’s gas company, Gazprom, charges clients elsewhere.

 

Russia says the increase is justified because it seized control of the Crimean Peninsula, where its Black Sea naval fleet is stationed, ending the need to pay rent for the Sevastopol base. The base rent had been paid in the form of a $100 per 1,000 cubic meter discount on natural gas for Ukraine’s national energy company, Naftogaz.

And if that's not clear enough...

 

Of course, not every country is as exposed as the chart above shows, however, as Reuters shows below, EU's eastern members depend very heavily on Russia...

Below are details of how some of the ex-Communist EU states are economically exposed to Russia:

BULGARIA

Imports from Russia accounted for 18.5 percent of Bulgaria's total imports last year, worth about $6.6 billion. Russia is Bulgaria's biggest source of imports.

Energy is the main import from Russia. Bulgaria gets about 90 percent of its gas from Russian firm Gazprom. Its only oil refinery, controlled by Russia's LUKOIL, works on Russian crude and its only nuclear power plant, which provides over 40 percent of electricity, operates two 1,000 MW Soviet-built reactors that work on Russian nuclear fuel.

Last year some 700,000 Russians were among Bulgaria's 2.6 million tourists. Tourism revenue makes up about 13 percent of annual gross domestic product.

CZECH REPUBLIC

In 2012, the latest year for which figures are available, 66 percent of Czech imports of natural gas came from Russia.

Exports to Russia in 2013 were worth $5.83 billion, and represented 3.67 percent of total exports. Imports from Russia were worth $7.80 billion.

Russia's largest steelmaker Evraz has a plant in the Czech Republic.

A consortium including Russia's Atomstroyexport is competing in a multi-billion dollar tender to expand the Temelin nuclear power plant. Russian firm TVEL supplies CEZ nuclear power units with fuel.

In 2013, Russians accounted for the second largest group of tourists coming to the Czech Republic with 759,000 people, or 10.4 percent of total tourists.

HUNGARY

Russia is Hungary's largest non-EU trading partner. Exports to Russia last year were worth 2.55 billion euros ($3.5 billion), of total exports worth 81.7 billion euros.

Hungary imports about 80 percent of its gas needs from Russia.

The government has signed an agreement with Russia's Rosatom to expand the Paks nuclear power plant that supplies about 40 percent of Hungary's electricity.

Russia is Hungarian drug maker Richter's biggest market. The company has warned first quarter profit will fall due to the rouble's slide.

LITHUANIA

About one fifth of Lithuanian exports go to Russia, though a large part of this is "re-exports," meaning that Lithuanians are importing the goods from a third country and then shipping them on to Russia.

* Lithuania and its industry are almost totally reliant on Russia for energy resources.

POLAND

Russia accounts for 90 percent of Poland's oil imports and more than half of its gas.

Russia is Poland's second largest trade partner, with combined 2013 imports and exports accounting for 8.8 percent of foreign trade, worth $36 billion.ROMANIA

Romania's exports to Russia totalled 1.3 billion euros ($1.8 billion) in the first 11 months of 2013 or 2.8 percent of overall exports. Romanian imports from Russia were 2.1 billion euros in January-November 2013, representing 4.2 percent of total imports.

Romania is much less dependent on imported gas than other countries in the region. Romanian gas fields provide about 80 percent of domestic needs, and President Traian Basescu said that if Russia cuts gas deliveries, the effects will not be substantial.

SLOVAKIA

Exports to Russia in 2013 were worth 2.55 billion euros ($3.5 billion), or 3.96 percent of total exports. Imports from Russia were worth 6.15 billion euros ($8.5 billion)

Fuel for two nuclear power plants is imported from Russia. Russian firm Rosatom has been in talks to take part in constructing new nuclear power units in Slovakia.

Slovakia is nearly 100 percent reliant on Russian gas, and its budget revenues depend on the tariffs it charges for Russian gas crossing its territory.

SLOVENIA

Slovenia is among the EU countries with the largest surplus in trade with Russia. It exports some 1 billion euros of goods and services to Russia per year, about 4.6 pct of total exports.

For Slovenia's largest listed company, pharmaceutical firm Krka, Russia is the biggest single market. Krka has a factory in Russia and last year sold products worth 300 million euros ($413.5 million) to Russia, a quarter of its total sales.

 

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Mon, 03/24/2014 - 17:28 | 4587309 Zymurguy
Zymurguy's picture

Crimea must be worth about, what... 11B?  So we call it even eh, Comrade?

Mon, 03/24/2014 - 17:32 | 4587323 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

The Natgas won't bite until next year's winter that much. Diesel will bring Europe to its knees, quickly. Prepare for price pain.

Mon, 03/24/2014 - 17:34 | 4587337 WayBehind
WayBehind's picture

Obama will be happy to pickup the tap. The printer is already running so just give a call to Yellen to print some extra and everything is ALL RIGHT

Mon, 03/24/2014 - 17:36 | 4587354 icanhasbailout
icanhasbailout's picture

Oh dear. Seems supply is a good deal more elastic than demand.

Mon, 03/24/2014 - 17:41 | 4587383 johnQpublic
johnQpublic's picture

never saw that coming

Mon, 03/24/2014 - 17:48 | 4587425 kaiserhoff
kaiserhoff's picture

Or maybe it's Spring in Europe too.

Did Bloomy consult a calendar?

Mon, 03/24/2014 - 18:01 | 4587477 zaphod
zaphod's picture

Good thing Germany essentially abandoned the nuclear industry after the disaster in Japan. Taking those steps to remove a cost effective and stable source of energy sure looks smart now.  /s

When I was in Korea, they had around 80% of all electricity generated by next generation nuclear plants, and I think it's even higher now. Nations become surprisingly free to pursue their own direction when they don't have to grovel to states like Russia every month for unstable energy supplies. 

Mon, 03/24/2014 - 18:45 | 4587662 Keyser
Keyser's picture

Yet another stroke of foreign policy genius for the Kenyan boy-messiah. I wonder what he will phuck up next. 

 

Mon, 03/24/2014 - 18:36 | 4587667 Latina Lover
Latina Lover's picture

Merkel claims she is willing to make Russia suffer even if it hurts Germany.... Lets see if Germans  will give up their hot bratwurst and cold beer....counting down to the reversal of sanctions.....3....2....1..

Mon, 03/24/2014 - 19:18 | 4587834 eurogold
eurogold's picture

I love your avatar ! Totally my thing!

Germany is just "towing the line" that Obama wants to project. And we are not happy about Angie doing this either!

Mon, 03/24/2014 - 18:41 | 4587680 Kirk2NCC1701
Kirk2NCC1701's picture

"No soup for you" tonight, Frau Merkel.

Mon, 03/24/2014 - 18:46 | 4587710 Debugas
Debugas's picture

Germany will be supplied via NordStream

Mon, 03/24/2014 - 22:04 | 4588493 Independent
Independent's picture

Tell that to the people living around and downstream and downwind from Fukushima.  One nuclear mishap like that and you end up with large parts of your country uninhabitable for thousands of years.  No thanks.  Rather have cleand food and water than play dumb geopolitical games.  Besides Germany is an export economy they are vulnerable because of that also.

Mon, 03/24/2014 - 23:23 | 4588759 Totentänzerlied
Totentänzerlied's picture

"cleand food and water"

Right, the act of burning hydrocarbons doesn't constitute pollution.

Looks like beggars are still able to be choosers, for now.

Mon, 03/24/2014 - 17:51 | 4587437 Volkodav
Volkodav's picture

Unusual warm weather in Russia. Russians normally have more holiday than west.

Decided take some more time off and work harder later...

Nevermind what Europe think.. or can understand anything at top levels

Mon, 03/24/2014 - 20:05 | 4588037 Jack Burton
Jack Burton's picture

Russia may see record heat this summer. The odds are looking like El Nino year, and Siberia is already in second week of a heat wave. Kara sea ice breaking up already. Worst case for Russia is a repeat of tiga fires or even fires like a few years back in European Russia. Good luck, I see potential for record heat dome forming over Russia this year. 65% is my best guess. No such thing as positive, but trending towards record heat.

Mon, 03/24/2014 - 17:39 | 4587375 Occident Mortal
Occident Mortal's picture

Time for Draghi to print diesel.

Get to work Mr Chairman...

Mon, 03/24/2014 - 18:17 | 4587569 Boris Alatovkrap
Boris Alatovkrap's picture

Barry is busy picking wood or iron.

Mon, 03/24/2014 - 18:23 | 4587596 kaiserhoff
kaiserhoff's picture

At least the cherries are safe around him.

Mon, 03/24/2014 - 18:03 | 4587488 eurogold
eurogold's picture

You must be joking. E.U. will find other sources and Russia will suffer from the losses. Russia is more dependent on the E.U than E.U. is upon Russia

Mon, 03/24/2014 - 18:13 | 4587533 CrashisOptimistic
CrashisOptimistic's picture

You don't seem to have been paying attention.

China is drinking all that any other source can pump.  All of it, and they still want more.

There IS no other source.

Mon, 03/24/2014 - 18:20 | 4587586 eurogold
eurogold's picture

OK, you might be right. I may not be paying attention. All I know living here in the E.U. is that no one I know is worried about heating their home for next winter. Germany atleast is well prepared -sorry

Mon, 03/24/2014 - 18:50 | 4587723 css1971
css1971's picture

And they won't be worried for a while. Russia will just keep incrementing the prices and next year or the year after it'll start to hurt, but never too much. Just a constant nagging increase in the cost of fuel.

p.s. I don't know anyone who claims they are living in the E.U. They always state the country.

Mon, 03/24/2014 - 19:19 | 4587842 Berspankme
Berspankme's picture

Must be a Brussels dude. Is that you Von Rumpboy?

Mon, 03/24/2014 - 19:20 | 4587846 eurogold
eurogold's picture

Then maybe you don't understand the concept of "the E.U." ?

Mon, 03/24/2014 - 20:59 | 4588229 angel_of_joy
angel_of_joy's picture

Just another clown pretending to be "the world".

What PART of EU are you living, you moron ?

Mon, 03/24/2014 - 18:51 | 4587726 Keyser
Keyser's picture

Really, where is Germany's alternate source of petrol, diesel, benzine and kerosene? Some have very short memories.

http://news.bbc.co.uk/2/hi/6243573.stm

 

Mon, 03/24/2014 - 19:05 | 4587781 css1971
css1971's picture

Coal to Liquids if they start getting desperate enough.

All of the alternative options are years away though.

Mon, 03/24/2014 - 18:51 | 4587730 RafterManFMJ
RafterManFMJ's picture

The European peasantry are so unaware the Eloi are embarrassed to be seen with them.

And that said, the American Booberati are even worse.

Mon, 03/24/2014 - 19:02 | 4587776 eurogold
eurogold's picture

I do so love "European peasantry" have you noticed the homeless on every corner in the U.S. lately?  I have, when I go to Florida on vacation every 6 months for 4 weeks to visit my Condo.

Mon, 03/24/2014 - 21:17 | 4588287 HyperinflatmyNutts
HyperinflatmyNutts's picture

how do you arrive at that? some facts pease?

Mon, 03/24/2014 - 18:04 | 4587496 Freddie
Freddie's picture

Dual citizen and evil scumbag Victoria Nuland aka Nudelman - "F the EU!" 

https://www.youtube.com/watch?v=dsfV-8a_zrs

Mission accomplished!

Mon, 03/24/2014 - 18:05 | 4587500 kchrisc
kchrisc's picture

Diesel.

I wonder if they saw that one coming?!

 

Europe to Russia: "Please turn our diesel back on so we can fuel our tanks. Thanks."

Mon, 03/24/2014 - 18:16 | 4587557 eurogold
eurogold's picture

Kchrisc, you have no clue- sorry

Mon, 03/24/2014 - 18:39 | 4587681 waterwitch
waterwitch's picture

When Russia ceases to be an exporter due to internal needs, then you know the SHtF.  cf Mexico's oil output, or Norway, or ????

Mon, 03/24/2014 - 18:21 | 4587592 eurogold
eurogold's picture

Dream on.... there is more going on here in the E.U than "diesel"......how primative.

Tue, 03/25/2014 - 00:55 | 4588938 Joe A
Joe A's picture

A tacky song comes to mind: "it's gonna be a cold and lonely Christmas without you".

Mon, 03/24/2014 - 17:34 | 4587339 DoChenRollingBearing
DoChenRollingBearing's picture

Within every crisis there is an opportunity, ask anyone who knows written Mandarin.  But, Europe could start a grand new project to unhook themselves from unreliable and prickly supplier Russia and start getting its gas (and other energy) from many other suppliers and places.

Does Europe have the guts to do this?  Is it even possible?

Mon, 03/24/2014 - 17:47 | 4587413 Volkodav
Volkodav's picture

It is already grand new project of Europe (and other) that cause the trouble, not Russia.

Russia never started this crap and always patient..even when gas stolen and never paid for.

get real

Mon, 03/24/2014 - 18:03 | 4587487 john39
john39's picture

heard on the radio the other day (NPR-national propaganda radio) that Germany was working towards a solution of renewable energy to replace what Russia supplies...  you know, wind and solar...  after all the rosy talk about green energy, even the propagandists had to admit that Germany has been increasing its coal consumption....  gasp!

Mon, 03/24/2014 - 18:06 | 4587504 eurogold
eurogold's picture

Excuse Me for having to defend Germany but Germany actually exports 25% more energy than it uses. Ask France who is selling electricity into the french market ( and making french atomic powerplants lose money) 

Mon, 03/24/2014 - 18:15 | 4587553 CrashisOptimistic
CrashisOptimistic's picture

You don't seem to know very much about oil and where it comes from.

Germany has none.

Mon, 03/24/2014 - 19:02 | 4587770 css1971
css1971's picture

Has a vague understanding of the word "energy".

Mon, 03/24/2014 - 19:05 | 4587785 eurogold
eurogold's picture

You might be right, maybe Germany will consider fracking to make it "energy independent" like the U.S. thinks it is .

Mon, 03/24/2014 - 18:06 | 4587506 Freddie
Freddie's picture

NPR - filled wiith lots of leftist dual citizens and NeoCons.

Mon, 03/24/2014 - 22:12 | 4588526 Independent
Independent's picture

Right on the money even PBS, I was watching news hour and was like what is with all the dual citizens on here as guests day in and day out, and what is it with Judy Woodruff that lady is about to keel over, hasnt she made enough money, she can retire, lets get a younger person in there that can ask some provocative questions

PBS is toeing the main govt line as much as the big media.  Bunch of sellouts

Mon, 03/24/2014 - 18:08 | 4587512 kchrisc
kchrisc's picture

Any one that has lived or spent some time in Germany will laugh at the use of "solar" and "Germany" in the same sentence or even paragraph.

Mon, 03/24/2014 - 18:13 | 4587535 eurogold
eurogold's picture

Really ? You seem to know about energy politics in Germany. Tell me how it is that Germany produces 25% more energy than it uses? Germany then sells this energy to it's neighbors. This pisses them off as it is cheaper than the energy they themselves produce. F.Y.

Mon, 03/24/2014 - 18:19 | 4587579 sessinpo
sessinpo's picture

eurogold   Tell me how it is that Germany produces 25% more energy than it uses? Germany then sells this energy to it's neighbors.

---

Get in line. Many countries actually produce enough energy for their own needs, yet they export that oil in the international market to get higher prices, thus the domestic prices seems higher then it should be. And it always pisses off the domestic population.

 

Mon, 03/24/2014 - 18:27 | 4587623 eurogold
eurogold's picture

I really am not here to argue. I am just amazed by the expert knowledge of some posters who think the E.U. is in some way dependent upon Russia for energy. This is not the case - sorry

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