ARD NEWS


By Vivian Nereim, Wael Mahdi and Elena Mazneva on 2/14/2018


RIYADH, KUWAIT and MOSCOW (Bloomberg) — Russia and Saudi Arabia are seeking ways to amplify the success they’ve had working together to manage the oil market by reaching new energy agreements, including one on liquefied natural gas.


The two energy giants, which orchestrated an oil-cuts agreement that helped crude prices recover to a three-year high, may announce an LNG pact later on Wednesday, Saudi Arabian Energy Minister Khalid Al-Falih told reporters in Riyadh before a planned meeting with his Russian counterpart. It would be “a big announcement” from Saudi Aramco on a partnership in the super-chilled fuel, Kirill Dmitriev, chief executive officer of the state-run Russian Direct Investment Fund, said in the Saudi capital. Neither gave further details.

Russian President Vladimir Putin made a priority of expanding the nation’s LNG industry last year, and the country is seeking new partners in projects to overtake the fuel’s biggest producers, including Qatar and Australia. Saudi Arabia is looking from Russia to East Africa and the U.S. for natural gas assets as state-owned Aramco, known formally as Saudi Arabian Oil Co., hunts for ways to meet soaring domestic demand.


The Saudis target doubling their own gas production in the next decade, Al-Falih said Wednesday in Riyadh. Russia last year offered the kingdom an opportunity to join a planned $20 billion LNG project in northern Siberia called Arctic LNG-2 which may start in 2022 or 2023. No decisions on such a partnership have been announced. Al-Falih didn’t rule out buying LNG from Russia, in an interview in December, though he said at the time it wasn’t the most economical option. Russian companies are interested in building regasification terminals in Saudi Arabia because the kingdom will need these projects if it decides to import LNG, Russian Energy Minister Alexander Novak said earlier this month. Novak is holding meetings today in the Saudi capital.


Source: World Oil 2018

22 Jan 2018


Seventy-five years since the first Australian embassy opened in Russia, on 26 January 1943, Moscow wants to strengthen dialogue with Canberra to build a regional architecture of equal and indivisible security based on a non-aligned approach. Last year marked the 75th anniversary of the establishment of diplomatic relations between Russia and Australia. The ensuing decades have been rich in events which give us plenty of examples of joint efforts for the benefit of our countries.


The history of Russia’s contacts with the Australian continent is centuries long. On 16 June 1807, the Russian sloop Neva called at Port Jackson (today’s Sydney) to replenish its stock of provisions and fresh water. The same year Lachlan Macquarie, a young officer who later became a prominent Australian politician and governor of New South Wales, visited Baku, Astrakhan, Moscow and St Petersburg on his way from Australia to London as a member of a diplomatic mission. Between 1807 and 1835, 15 Russian vessels, including the ships on which famous Russian seafarers Faddey Bellinsgauzen and Mikhail Lazarev set sail to search for the Antarctic, called at Port Jackson and Hobart.


In the middle of the 19th century, the number of Russian immigrants in Australia started to increase. In 1857, two consular missions were opened in Melbourne and Sydney to protect the interests of Russian nationals. Australian tradesmen James Damyon and Edmund Paul were appointed honorary vice consuls. Later, the Russian Empire appointed honorary vice consuls in Adelaide, Brisbane, Port Elizabeth, Hobart and Perth. In 1894, the Russian Honorary Vice Consulate in Melbourne was raised to a Consulate.


In London, on 10 October 1942, the USSR and Australia signed the Agreement on the Establishment of Diplomatic Relations. On 2 January 1943, Australian diplomats travelled to Kuybyshev (today’s Samara) to set up an embassy which was opened on 26 January, Australia Day. The Soviet diplomatic mission was established in Canberra in 1943.


We remember the support provided by Australia to our country during the harsh years of the war against fascism. Australia launched a broad campaign ‘Sheepskin for Russia’, thanks to which our soldiers received about 400,000 sheepskin coats from Australia, and Soviet hospitals were supplied with about 40 containers of medicine and medical equipment. The allied convoys, with the participation of Australian pilots and sailors, played an important role in the defeat of Nazism. For their distinguished service, they have been awarded Ushakov medals, as well as jubilee medals to commemorate succeeding anniversaries of the Victory in the 1941–1945 Great Patriotic War.


During the Cold War, the relations between our countries remained mutually respectful. There were exchanges of messages at the top level on the most acute issues of international security, including the nuclear disarmament problem. The two countries signed a trade agreement (1965) and a number of other intergovernmental documents. In 1975, Edward Gough Whitlam became the first Australian prime minister to visit our country. Ten years later the volume of trade turnover peaked, exceeding $1 billion.


Nowadays, our countries maintain political dialogue, including at the highest level. President of the Russian Federation Vladimir Putin met Prime Minister of Australia Malcolm Turnbull on the sidelines of the G20 summits in Antalya (November 2015) and Hangzhou (September 2016) and the APEC forum in Lima (November 2016). Naturally, the two countries’ approaches do not always coincide, but Russia is ready for broader cooperation based on mutual respect, the rule of law, non-interference into domestic affairs and regard for each other’s interests.


The legal framework of bilateral relations continues to improve. Our countries have signed several agreements: on the avoidance of double taxation (2000), on cooperation in the field of the exploration and use of outer space for peaceful purposes (2001), and on cooperation in the use of nuclear energy for peaceful purposes (2007).


We note considerable potential for building up interaction in trade and investment. In recent years, cooperation in the mining sphere has deepened. Russian company, UC Rusal has been successfully operating in the Australian market. Such mining companies as BHP Billiton, Rio Tinto, WorleyParsons and Orica cooperate with Russia. Australian coal company, Tigers Real Coal, and its Russian partner JSC “Severo-Tikhookeanskaya Ugolnaya Kompaniya” (“North‑Pacific Coal Company”) are jointly developing the Amaam coking coal field in the Chukotka Autonomous Region.


Cultural and humanitarian ties have been steadily enhanced. In the past two years, Australia hosted the performances of famous Russian musicians Maksim Vengerov and Denis Matsuev, as well as conductor Valery Gergiev with the London Symphony Orchestra. Russian pianists Andrey Gugnin and Arseny Tarasevich-Nikolaev won the Sydney International Piano Competition. In 2016, the annual film festival, Russian Resurrection, was successfully held in five Australian cities—Brisbane, Canberra, Melbourne, Perth and Sydney—and remains a memorable event. The State Hermitage Museum, which organised such exhibitions as ‘Alexander the Great’ (2013) and ‘The Legacy of Catherine the Great’ (2015), is a regular and welcome guest in Australia.


The Russian side annually allocates state scholarships for Australian citizens to study at Russian universities. A number of leading universities of our countries, such as Lomonosov Moscow State University, the Saint Petersburg Mining University and the University of New South Wales, are implementing the programs of cooperation and student exchange.

Australia has become home to many outstanding Russians, among whom was the world-renowned anthropologist and ethnographer, Nicholas Miklouho-Maclay. Today, more than 100,000 compatriots live in Australia; there are Russian language print and online media outlets, and festivals of Russian culture are held regularly.


Russia and Australia interact at the international level, primarily in the Asia-Pacific, a region whose role in world politics and economy is steadily increasing. Moscow is interested in strengthening dialogue with Canberra, an active participant in regional groupings, in order to ensure stability and steady growth in the Asia-Pacific and to build a regional architecture of equal and indivisible security based on a non-aligned approach. We are ready to increase cooperative efforts to find effective responses to numerous challenges and threats, including terrorism and extremism, based on the fundamental norms and principles of international law and the central coordinating role of the United Nations.


We are convinced that there are the necessary prerequisites for bringing Russian-Australian relations to a new level for the benefit of the peoples of our two states, in the interest of strengthening regional and global stability and security. What needs to be done is to put it all into practice.


Sergey Lavrov is the Minister of Foreign Affairs of the Russian Federation.

This article is published under a Creative Commons Licence and may be republished with attribution.


http://www.internationalaffairs.org.au/australianoutlook/russia-australia/

The Australian, 12:00AM January 10, 2018.


East coast gas exports are at record levels as Queensland’s three big liquefied natural gas plants run hard to meet growing Chinese demand that has sent spot prices soaring and pushed east coast domestic gas prices higher.

But the higher domestic prices have been contained, indicating that Malcolm Turnbull’s moves to ensure the three big gas exporters, Origin Energy, Shell and Santos, did not leave domestic markets short have worked so far in a hot summer.




Further evidence of this is the fact that the big Bass Strait gas fields owned by ExxonMobil and BHP Billiton — which have been running at record rates this year to supply extra demand driven by the LNG plants — last month started a production pullback without a big rise in spot prices.


Gladstone port statistics show LNG exports jumped 17 per cent from the previous month to 1.99 million tonnes. The move eclipsed the previous record of 1.75 million tonnes set the previous December. The three plants built at Gladstone for a cost of $70 billion, which have rapidly tripled east coast gas demand, are now able to run at full capacity. The plants have opened domestic markets to international prices, meaning contract prices have risen from $3 to $4 per gigajoule to $8 to $10 or more, spurring warnings of looming job cuts and increased power prices.


Citi analysts said spot gas prices in Australia’s southeastern states averaged $7.40 per gigajoule in December, up 9 per cent from the previous month. “Higher domestic gas prices seem to be a function of both higher LNG export prices as well as increased use in electricity generation during the summer,” Citi analyst Dale Koenders said. “LNG producers continue prioritising exports over domestic markets … while power demand rose in the southern states in a hotter than usual December, net contributions to the domestic markets remain low with producers leaning on exports on the strength of high spot LNG prices.”


Australian Energy Market Operator data shows that the Longford gas plant that processes gas from Bass Strait has pulled back from about 1100 terajoules of production per day from June to September, to about 900 terajoules in December. That this has not resulted in a spot price surge indicates domestic markets remain well supplied for now. Spot LNG has more than doubled in the past six months as China has accelerated a shift from coal-fired power and heating to gas to tackle air pollution. Asian spot prices are now at $US10.86 per million British thermal units, or $14.60 per gigajoule.


The increased LNG demand and spot price rise, combined with a hike in international oil prices that contract LNG sales are linked to, has sent Santos shares to a two-year high of $5.60, nearly doubling from $3 at the start of June. Origin Energy, which operates the Australia Pacific LNG plant with ConocoPhillips, is also at a two-year high, having risen 40 per cent in the past three months to $9.75. The surging LNG prices and Chinese demand, if contained, are refuting the argument that Australian businesses are paying more for wholesale gas than their Asian counterparts.


Not that this is good news for local users. If the increase is long-term, it could spell the end of AGL Energy’s plans for a $250 million LNG import plant in Victoria to increase competition in the southern states by making imports uneconomic. In August, AGL said it could import gas to Victoria at a price of between $8 and $10 per gigajoule. This was when spot LNG prices were still below $US6, indicating any LNG that was imported to Victoria at current prices would cost well over $10 per gigajoule. Still, at an investor briefing in early December, when prices had climbed to $US9, AGL said it was “reasonably confident” of the economics of the terminal, which would be built at Crib Point.


City said it did not expect surging Chinese demand to keep LNG markets tight for long. “Policy-accelerated gas demand growth in China has occurred faster than the infrastructure and domestic gas supply can keep up, in turn placing greater reliance on China LNG imports,” Citi analysts said. “However, we expect China’s domestic gas markets will respond with increased production and storage, prior to Russian pipeline supply late 2019, mitigating the ongoing impact.”


http://www.theaustralian.com.au/business/mining-energy/lng-exports-soar-but-local-prices-contained/news-story/dd605935aa8a42bb779959cc14ec38b7