Trump to promote U.S. gas exports in Russia’s backyard

(Extracts from Washington, Reuters, by Roberta Rampton and Timothy Gardner on 7/3/2017).

President Donald Trump will use fast-growing supplies of U.S. natural gas as a political tool when he meets in Warsaw on Thursday with leaders of a dozen countries that are captive to Russia for their energy needs. In recent years, Moscow has cut off gas shipments during pricing disputes with neighboring countries in winter months. Exports from the United States would help reduce their dependence on Russia. Trump will tell the group that Washington wants to help allies by making it as easy as possible for U.S. companies to ship more liquefied natural gas (LNG) to central and eastern Europe, the White House said. Trump will attend the “Three Seas” summit – so named because several of its members surround the Adriatic, Baltic and Black Seas – before the Group of 20 leading economies meet in Germany, where he is slated to meet Russian President Vladimir Putin for the first time.

Among the aims of the Three Seas project is to expand regional energy infrastructure, including LNG import terminals and gas pipelines. Members of the initiative include Poland, Austria, Hungary and Russia’s neighbors Latvia and Estonia.

“In many ways, the LNG exports by the U.S. is the most threatening U.S. policy to Russia,” said Michal Baranowski, director of the Warsaw office of think-tank the German Marshall Fund. The U.S. is expected to become the world’s third-largest exporter of LNG in 2020, just four years after starting up its first export terminal. U.S. exporters have sold most of that gas in long-term contracts, but there are still some volumes on offer, and more export projects on the drawing board.

Cheniere Energy Inc, which opened the first U.S. LNG export terminal in 2016, delivered its first cargo to Poland in June. Five more terminals are expected to be online by 2020. Tellurian Inc has proposed a project with a price tag of as much as $16 billion that it hopes to complete by 2022, in time to compete for long-term contracts to supply Poland that expire the same year and are held by Russian gas giant Gazprom. A global glut in supply may, however, limit U.S. LNG export growth, regardless of Trump’s support. Russia has the advantage in Europe due to its proximity and pipeline connections.

Europeans will be watching to see whether Trump clarifies his administration’s position on a new pipeline to pump Russian gas to Germany, known as Nord Stream 2. The U.S. Senate in June passed a package of sanctions on Russia, including provisions to penalize Western firms involved in the pipeline. The new sanctions have stalled in the House of Representatives. The U.S. State Department has lobbied against the pipeline as a potential supply chokepoint that would make Europe more vulnerable to disruptions. The threat of sanctions adds to tensions between Washington and Berlin. Germany’s government supports the pipeline, and Trump’s position on it is a concern for European diplomats.

Breakfast Meeting with the Russian Ambassador, His Excellency Mr Vladimir Morozov

Australian Club, Melbourne

July 31.

Over 25 senior business leaders attended ARD’s inaugural Business over Breakfast event in what was a frank and far reaching discussion.

His Excellency Mr Vladimir Morozov, Russian Ambassador to Australia, opened the session with a wide ranging speech that included some analysis of the current economic conditions in Russia, and its recent shift to greater engagement with China. While Western sanctions have caused some problems for international trade and financing they have not prevented Russia from fully engaging in multilateral fora such as APEC, G20 and FATF, nor has it damaged the Russian Government’s relationship with foreign investors. His Excellency also pointed out that the distance from Darwin to Vladivostok is equal to that of Darwin to Beijing negating the tyranny of distance theory for the small levels of engagement of Australian businesses with Russia.

Finally, Ambassador Morozov announced that under Russian President Vladimir Putin’s initiative, the first Eastern Economic Forum will be held in Vladivostok in September this year. The agenda includes detailed presentations of the Government’s plans to develop the region and the Ambassador offered the support of the Embassy to facilitate invitations, visas and other logistic arrangements.

In the ensuing open conversation around the table, guests were generally positive about their experiences in doing business with Russia and were keen for more Australian companies to enter the market. While resources and agribusiness are the two industries that have the most activity, participants were of the view that it is in everyone’s interests to expand into other industries to broaden the appeal of the bilateral relationship.

One immediate opportunity that was identified was the International Mining and Resources Conference that is to be held in Melbourne 9 – 13 November 2015 and this is now on the ARD calendar of events.

The Impact of Foreign Direct Investment in the Socio-Economic Development of the Far East of Russia

These reports have been provided courtesy of Kinross Gold Corporation.

http://kinross.com/

Kinross Gold Corporation engaged the Centre for Economic and Financial Research (CEFIR) of the New Economic School in Moscow to prepare a study on the above topic. This study was prompted by the focus placed on the importance for the Russian Government of the development of the Far East. As one of relatively few foreign direct investors in the Region, Kinross has had almost twenty years of experience with successful investments and is keen to see other international companies from the resource, manufacturing and services sectors, also invest in the Far East.

The report produced as part of the study is intended to answer some basic questions: what is the level of current FDI?; what do existing foreign investors see as the advantages and disadvantages if investing in the Far East?; how do local officials see the role of foreign direct investors and what do they believe must be done to encourage additional foreign direct investment?, etc. It is hoped that the results of the survey and the assessments of the Russian academics that have conducted considerable desk research would prove instructive and interesting for Russian policy-makers as they determine what to do to help accelerate the development of the Far East.

Member companies of the Foreign Investment Advisory Council (FIAC), and those of us involved in the Working Group on the Far East, have a common interest to provide advice and recommendations to the Russian Government on measures intended to improve the investment climate in Russia. In the past few weeks, some members of the Working Group have met twice with officials from the Ministry for the Development of the Far East, including with Minister Galushka. At the first meeting in October, in answer to his question: “what do foreign investors want and need from the Russian Government in order to invest in the Far East?”, we presented him with a copy of our report, hoping that the views of current investors and local officials reflected in the report would provide some answers. In the second meeting one of his colleagues requested more specific recommendations, and some of the companies present on the day have already submitted their recommendations.

The report is available in English and Russian.