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Russian Billionaire Timchenko Calls China Gas Deal "The Most Important Event Of The Past Decade"

Tyler Durden's picture




 

We may have dubbed Russia's historic, and 30 years in the making until John Kerry et al accelerated it, gas deal as the "Holy Grail" of New Normal trade arrangements, and it turns out we weren't alone in evaluating the strategic implications of this epic Russian, and Chinese, pivot toward each other. Moments ago, Russian billionaire Gennady Timchenko, shareholder of Gazprom competitor Novatek, chairman of the Russian-Chinese Business Council, and former co-owner of commodities trading giant Gunvor, said that "Economically it’s the most important event of the past decade."

Some of Timchenko's other soundbites via Bloomberg:

  • "The contract allows a balance between Europe and China”
  • "There will probably come a time when Gazprom’s monopoly won’t be a monopoly"

More importantly, now that the ground has been set, the Gazprom-CNPC deal is just the beginning:

  • Timchenko says also seeking to expand Yamal LNG, Sibur business with Asia; Volga Group is looking at China projects
  • China Harbour Engineering signed memorandum on Kolmar coal mining, Sakhatrans port projects in Russia’s Far East; may form JV
  • Chinese propose participation in domestic pipeline projects, LNG terminals to Timchenko, as Volga Group owner and Novatek board member
    "We have the desire” to invest in China, no specific talks for now
  • Volga has water reservoir in China, doesn’t rule out investing in development for bottled water

It may be ironic, but quite soon China could participate in building a bridge between Russia and its latest territorial property: Crimea.

  • USK Most, co-owned by Volga, plans to bid in tender to build bridge between Russia, Crimean Peninsula through Kerch strait together w/ Mostotrest, co-owned by Arkady Rotenberg, also on U.S. sanctions list
  • Says doesn’t rule out China cos. participating in bridge project

Finally, here is why the next company to feel the "costs" of US sanctions will not be Russian, but America's own Caterpillar:

  • If sanctions tightened, Volga Group construction units may seek equipment suppliers in China to replace U.S. cos. such as Caterpillar

Which of course would be even more bullish for CAT as it would force management to lever up even more and to buyback a record amount of its own shares just to give the impression that collapsing revenue and future business prospects is the most bullish thing that could happen to the industrial giant.

 

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Thu, 05/22/2014 - 08:59 | 4784368 fonzannoon
fonzannoon's picture

My favorite is the Redhead who asked for Tina Fey

http://live.wsj.com/video/at-nyu-commencement-who-is-janet-yellen-2014-0...!FFE00129-EEF6-4F70-B949-9557BC061101

Thu, 05/22/2014 - 09:07 | 4784387 GetZeeGold
GetZeeGold's picture

 

 

Are we done with first evers yet?

 

Can we just get some people that know what the hell they're doing?

Thu, 05/22/2014 - 09:15 | 4784398 Smegley Wanxalot
Smegley Wanxalot's picture

"people that know what the hell they're doing" ... that itself would also be a "first-ever."

Thu, 05/22/2014 - 09:18 | 4784417 power steering
power steering's picture

Many consider the plastic surf lease the greaatest invention of the post war era.....

Meanwhile what are the barriers to entry in the market served by billion dollar company "GoPro"?

Thu, 05/22/2014 - 09:17 | 4784414 NoDebt
NoDebt's picture

Fonz knows what he'd doing.  That's his way of saying "here's how much most people care about this."

Thu, 05/22/2014 - 09:22 | 4784436 fonzannoon
fonzannoon's picture

Thank you for that nodebt. I did not figure i'd be the first post. I found that vid of NYU graduates not knowing or caring who yellen was to be pretty funny. The few who did said the fed's job was to "keep us safe". I must admit i am bored to tears with this gas deal. so if i get junked for hijacking the thread I humbly say to my junkers, eat my ass.

Thu, 05/22/2014 - 09:27 | 4784466 BeetleBailey
BeetleBailey's picture

Agree Fonz....I talked to three college kids yesterday...was astounded of their lack of concern - or general knowledge....sad

Thu, 05/22/2014 - 10:16 | 4784610 earnyermoney
earnyermoney's picture

I seem to recall that the interns for the PPT of the NY Fed are from NYU. Scary.

Thu, 05/22/2014 - 10:40 | 4784682 IridiumRebel
IridiumRebel's picture

Hey, they just paid a quarter million dollars for that fancy degree that will ensure them years of debt servitude. Why would they need to care about the Federal Reserve or whatever it is. 

Thu, 05/22/2014 - 11:12 | 4784814 Carpenter1
Carpenter1's picture

Try being in Canada, even the mere mention of a negative data point gets you labeled a conspiracy theorist as you can visibly see the normalcy bias glaze over their eyes.

It's like living in 1984, but everyone is a true believer.

Thu, 05/22/2014 - 10:49 | 4784718 Canadian Dirtlump
Canadian Dirtlump's picture

The folks behind the curtain know exactly what they are doing and that is the scary part.

 

As for this I would say it's a holy grail deal for humanity and a poisoned chalice for the satanic mongoloid cabal.

Thu, 05/22/2014 - 09:33 | 4784485 BeetleBailey
BeetleBailey's picture

Just watched it.....fuckin tragic....how fucking DUMB can these peo...

wait...it's NYU.....the guy was talking to liberal artsy fartsy douchebags....

...check

Thu, 05/22/2014 - 09:37 | 4784493 fonzannoon
fonzannoon's picture

I wonder if it's dumb. Like you said it's just sad. These kids are just not set up to think that the system is set up in such a way. Their brains are not programmed that way. Their parents are all clueless. Somebody is on the hook for 50k plus a year for 4 years at NYU and a lot of those kids seemed like your typical liberal arts boneheads. They have no clue and the ones whose parents are not loaded have not had the realizaton yet that they won't need to worry about the fed because they are completely screwed in debt and are aleady toast.

Thu, 05/22/2014 - 13:08 | 4784593 Citxmech
Citxmech's picture

Yeah, most everybody is preoccupied and oblivious - but not all.  Just watched Comic Book Girl 19's "Epic Review" of the last Hunger Games movie and thought I had tuned into a Chris Martenson video for Christ's sake.  I was very pleasently surprised.  Some of the Gen Y crowd actually gets it - CBG19 sure does, and just maybe a few of her 250k subscribers will get trurned-on to the fuck storm that's coming.  

Ya can't force a sheep into a lifeboat, right? 

Thu, 05/22/2014 - 12:07 | 4785042 BeetleBailey
BeetleBailey's picture

It is sad. In my days in collegiate activities, these morons would be SCORNED for NOT knowing....NO one wanted to hang out with blithering idiots back then....

 

the change is now "dumb is the new "chic"....fucking utter nonsense....

Thu, 05/22/2014 - 18:17 | 4786640 StychoKiller
StychoKiller's picture

How "Kavorkianesque!" :>D

Thu, 05/22/2014 - 11:28 | 4784878 kchrisc
kchrisc's picture

New working link:

http://live.wsj.com/video/at-nyu-commencement-who-is-janet-yellen/FFE001...!FFE00129-EEF6-4F70-B949-9557BC061101

Thu, 05/22/2014 - 09:02 | 4784375 youngman
youngman's picture

And you can bet not one USA company will be able to bid on any of this work....

Thu, 05/22/2014 - 09:09 | 4784395 NoWayJose
NoWayJose's picture

Not now, anyway.

Thu, 05/22/2014 - 09:12 | 4784403 BlindMonkey
BlindMonkey's picture

Like Haliburton?

Oh yeah, they ain't American any longer. Maybe they do have a shot.

Thu, 05/22/2014 - 09:02 | 4784377 achmachat
achmachat's picture

I kept reading Timochenko and was extremely confused...

Thu, 05/22/2014 - 09:19 | 4784419 power steering
power steering's picture

It's a requirement for those with billion dollaar net worth

Thu, 05/22/2014 - 09:08 | 4784391 orangegeek
orangegeek's picture

isn't it wonderful when communists fall in love??

Thu, 05/22/2014 - 09:11 | 4784399 GetZeeGold
GetZeeGold's picture

 

 

At least they can do it without killing millions of people....at least for now.

Thu, 05/22/2014 - 09:09 | 4784394 LawsofPhysics
LawsofPhysics's picture

Given that the last decade has predominantly been about financialization and fraud he really isn't setting the bar that high, but yes, I agree.

Thu, 05/22/2014 - 09:18 | 4784418 CrashisOptimistic
CrashisOptimistic's picture

LoPdood, hope you saw the Monterrey shale news.

Another tidbit out.  New Zealand source says China is filling their SPR and pressuring prices (in preparation for war).

Well, maybe, except the price was north of $100 in late December before there were any tensions.

Thu, 05/22/2014 - 09:20 | 4784429 power steering
power steering's picture

Even with overstated reserves MS is BS

Thu, 05/22/2014 - 09:40 | 4784442 LawsofPhysics
LawsofPhysics's picture

My brother farms about 15,000 acres on the south island.  They are well aware of what the chinese are up to.  There's a reason New Zealand has strict immigration laws.  I have another borther in oil and gas, he has less than optimistic things to say these days, so we don't talk much anymore.

Thu, 05/22/2014 - 09:43 | 4784517 Hulk
Hulk's picture

I'd just like to say that my brother a borther too !!!

That is all for now, smoke if you got em and roll the motherfucking guillotines !!!

Thu, 05/22/2014 - 09:09 | 4784396 fonzannoon
fonzannoon's picture

No more gold smackdowns anymore. now it just spends all day like a full cup of water with a tiny hole in the bottom of it.

Thu, 05/22/2014 - 09:20 | 4784412 PowerPlayer
PowerPlayer's picture

I don't see how this will really impact the global price of gas.  World supply and world demand will be what it will have been anyway.  All this does is increase the transportation expense associated with moving the gas to market.  In essense, you are taking a product that is close to a consumer market and shipping it to a consumer market further away.  This is driven by politics, not common sense.

Europe just needs to wake up and realize that Putin is not a rational being.  They need to focus on energy efficiency and more diversity in energy sources, yes that means coal if necesdsary and then ally with other countries that have energy resources.   

Thu, 05/22/2014 - 09:21 | 4784427 CrashisOptimistic
CrashisOptimistic's picture

No, guy.

It's driven by the Chinese explosive consumption growth of damn near everything.

It's a billion people no longer content to ride bicycles and hold hands out to warm them by fires.

And you might want to consider the possibility that there ARE no alternatives and there IS no solution to Europe's dependency.  There is no law of the universe that says there has to be enough for everyone.

 

Thu, 05/22/2014 - 09:26 | 4784455 LawsofPhysics
LawsofPhysics's picture

That which cannot be sustained, won't be.  All things being equal, you tell me who has more experience killing people efficiently.  The West or the East?

Thu, 05/22/2014 - 11:30 | 4784507 bobby02
bobby02's picture

Gas, no, but on the margin it probably will (slightly) reduce demand for LNG and/or increase LNG prices. Course, be easier to say smth intelligent about this if we saw the real pricing formula, and/or knew what Vladivostok LNG terminal capacity will look like.

Thu, 05/22/2014 - 11:06 | 4784788 813kml
813kml's picture

The expected outcome would be a reduction of the everyone.

Thu, 05/22/2014 - 12:03 | 4785018 PowerPlayer
PowerPlayer's picture

Crash, I'm not saying gas prices won't rise.  If global demand outstrips global supply through more chinese consumption, that would happen regardless of whether the Russians are piping gas to China or not.  All this means is that the Russians will be transportating their gas thousands of miles to the Chinese market and the Canadians will be transportating their gas thousands of miles to Europe.

It is simply inefficient.

 

 

Thu, 05/22/2014 - 12:06 | 4785036 PowerPlayer
PowerPlayer's picture

Crash, if there is no alternative then what has fracking done for the USA?  There most certainly are alternatives.  If you think this is the end of human civilization I assure you that human being will come up with some altertnative to continue to exist.  If you want to bet on the end of human civilization I would gladly take the other side of that bet.    

Thu, 05/22/2014 - 09:22 | 4784433 power steering
power steering's picture

Yeah moar wind mills and so-laar

Thu, 05/22/2014 - 09:17 | 4784415 wagthetails
wagthetails's picture

Love it...our admin kills domestic pipeline deals but pushes other countries into them.  Truth really is stranger than fiction.

Thu, 05/22/2014 - 09:25 | 4784448 BurningFuld
BurningFuld's picture

Pipelines are evil because......   well they just are OK?

Thu, 05/22/2014 - 10:05 | 4784468 GetZeeGold
GetZeeGold's picture

 

 

What we need are trains.....trying to figure when and where exactly they're gonna derail is the fun part.

Thu, 05/22/2014 - 10:19 | 4784623 CharlieMike
CharlieMike's picture

Easy just look for the giant fireball in the sky!

Thu, 05/22/2014 - 10:26 | 4784640 earnyermoney
earnyermoney's picture

Uncle Warren has the trains. His private meetings with Zero drove that home in addition to reminding Barry it's time to collect on his campaign contributions.

Thu, 05/22/2014 - 09:27 | 4784464 TrumpXVI
TrumpXVI's picture

"Economically it’s the most important event of the past decade"

WHOA!

Color me Impressed!

What an amazing statement coming from the, "chairman of the Russian-Chinese Business Council."


Thu, 05/22/2014 - 09:49 | 4784530 post turtle saver
post turtle saver's picture

no kidding... talking his book... too bad it's already been hashed out in other threads that a) this deal is peanuts, and b) has absolutely no impact on the petrodollar's continued dominance

seriously, we got folks on RThedge that think $400B US over the course of a few years is big money... the US pisses that away in one department in less than a year

Thu, 05/22/2014 - 09:43 | 4784510 ebworthen
ebworthen's picture

It's the most important event of the past decade because it is the beginning of the end of the Dollar as the world's reserve currency.

Thu, 05/22/2014 - 09:50 | 4784538 Miffed Microbio...
Miffed Microbiologist's picture

Absolutely. I can't stack fast enough in this environment while others around me seem blissfully unaware. How many more warning shots will we get?

Miffed;-)

Thu, 05/22/2014 - 09:53 | 4784543 post turtle saver
post turtle saver's picture

lol wrong, not nearly big enough of a deal to pull that off... and, between two parties that could turn on each other at the drop of a hat

China needs to be able to keep a huge export margin with the largest consumer economy in the world just to keep their boat afloat... news flash, that ain't Russia, not by a long shot, nor will it be for the foreseeable future

I don't know how this translates in Chinese, but the phrase "don't shit where you eat" comes to mind... China knows this, they're just using Russia hugs & kisses as a negotiation point w/ the US

Thu, 05/22/2014 - 10:36 | 4784660 earnyermoney
earnyermoney's picture

And the Russians are using the Chinese hugs & kisses as a negotiation point with Europe. In the mean time we've lost our moral authority to stand up these thugs as we're no different or worse in some cases. See hypocrisy on Thailand via Jen Psaki of the State Department as the latest example.

Thu, 05/22/2014 - 12:48 | 4785235 ebworthen
ebworthen's picture

Sure, two nations with land masses, resources, and populations twice as large as the U.S. couldn't possibly affect our dominance.

Thu, 05/22/2014 - 19:57 | 4786940 post turtle saver
post turtle saver's picture

they could have had it all some time ago, if they weren't constantly at war with each other and being a bunch of dumbass communists... which they will continue to do and be, which is why there's little to worry about here

there's this other large surface area of the planet that the US owns outright that tends to have an impact on world dominance, in case y'all have forgotten

Thu, 05/22/2014 - 09:45 | 4784521 RaceToTheBottom
RaceToTheBottom's picture

OK, an opening sentence longer than most opening paragraphs and some novels. Please apply to the Book of World Records for the most commas in one sentence.

Bullish Records!!!

Thu, 05/22/2014 - 10:59 | 4784759 TrumpXVI
TrumpXVI's picture

Hey, you remember Tolstoy?  Dostoyevsky maybe?  It's Russians you're dealin' with here....this article coulda' easily ended up being 1,000 pages.

Thu, 05/22/2014 - 09:53 | 4784545 Fix It Again Timmy
Fix It Again Timmy's picture

The day that the dollar gets "junked" seems to be drawing near....

Thu, 05/22/2014 - 09:53 | 4784547 Fix It Again Timmy
Fix It Again Timmy's picture

"What's in your wallet?"...

Thu, 05/22/2014 - 10:06 | 4784585 Hulk
Hulk's picture

A picture of Karl Malden...

Thu, 05/22/2014 - 10:25 | 4784615 MFL8240
MFL8240's picture

The impending collapse of America compliments of the Kenyan clown and his total incompetence and the federal reserve liars and yet the people still dont get it.

Thu, 05/22/2014 - 10:18 | 4784621 ptolemy_newit
ptolemy_newit's picture

HSW  (Dressta )is a polish long term supplier to Russia of bulldozers, loaders and backhoes.

Fuck Cat.

Liugong start up and cold weather is superior

 

Thu, 05/22/2014 - 12:44 | 4785215 kurt
kurt's picture

First we invite chinese to make extensive notes about our manufacturing processes, then we actually train them, then we agree to move our manufacturing to their country, then they duplicate the plant, rebadged it, and start selling copies while keeping all the profit, no pay for license or patent infrigement. Then, sales falling, US company cuts back its less profitable domestic facilities, eventually selling the Chinese plant to China. They take their earlier profits, offshore them, or put them in a shell company, eventually declare bankruptsy, restructure, merger, or dissolution. All this was lubricated by bribes, booze, and hookers. That's how Caterpillar put the "Ho" in backhoe.

Thu, 05/22/2014 - 10:27 | 4784642 joego1
joego1's picture

I think the Rothchilds should change their name to the Rotenburgs. It suits them so much better.

Thu, 05/22/2014 - 11:29 | 4784883 kchrisc
kchrisc's picture

Oops.

Thu, 05/22/2014 - 11:50 | 4784952 Canucklehead
Canucklehead's picture

The Most Important Event of the Past Decade?  I realize they have been working on this deal for a decade.  What is the price of the gas being sold? Are there commitments to buy x cubic feet of gas at Y yuan or rubles?

How is this event more important than most?  It sounds like typical boilerplate to provide some political coverage of a weak position.

Thu, 05/22/2014 - 11:53 | 4784968 Atomizer
Atomizer's picture

Our billionaire T. Boone (Slim) Pickens lost creditability when knocking out a new globalized Nat gas plan. The cost of transportation out ways local logistic benefits to receive product using diesel. The same clap trap in converting all cars to diesel has fucked you over again, Mr. Boone.  

Thu, 05/22/2014 - 12:34 | 4785173 kurt
kurt's picture

Slim Pickens gained creditability when he unstuck the bomb bay doors and rodeo'd the nuke that ended the world.

 

Thu, 05/22/2014 - 12:44 | 4785218 JuliaS
JuliaS's picture

One of the reasons for Germany's involvement in WW2 was the continued allied sabotage of the Orient Express line designed to deliver oil from Baghdad to Berlin. Germany was trying to establish connections with the Saudi kingdoms 70 years ahead of the United States. Back then US had significant domestic reserves.  Germany had none.

Germany, however, was superior to the rest of the world in terms of industrial development and Allies well understood that with direct access to oil they would have become what US is today - a global empire. Deutchmark would've turned into a petrodollar and implications would've been exactly the same. The world would then have to subsidize German fractional reserve system instead of then dominant British and American alternatives.

Germany had to be made irrelevant and starved of the natural resources - put on a leash. Germany then tried taking by force what was peacefully denied and we all know how the rest played out.

The Brits and the Americans were afraid of becoming irrelevant.

The BRIC deals being formed currently pose a similar threat. That is why the West is hell-bent on preventing any Eastern integration. China got a huge boost from us, sucking up all the capital through outsourcing. Now it's going to use these savings to establish deals with a new trading partner. It's an equivalent of Germany successfully laying the last 200km of the Orient Express line. The world is about to become very different. We're talking the kind of difference there'd be if Allies had lost the war.

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