Gazprom eyes Asian LNG market

Updated 23 June 2013
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Gazprom eyes Asian LNG market

ST PETERSBURG: Gazprom is ready to take on potential Russian and Australian rivals for Asia's ballooning liquefied natural gas market, its export chief said after President Vladimir Putin signaled an end to its exclusive right to export LNG.
Putin said Gazprom's rivals such as Russian company Novatek, which is building an LNG plant on the Arctic Yamal peninsula, would gradually be allowed to export LNG, a move seen by analysts as a first crack in Gazprom's legally enshrined export monopoly.
Novatek has said that the rising costs for new Australian LNG capacity have led to Asian interest in its Arctic gas, even though this will have to be liquefied and shipped via the so-called Northern Sea Route accompanied by icebreakers.
By contrast, state-controlled Gazprom has a project to liquefy gas at Vladivostok on the Pacific coast, much closer to Asian markets.
"If production and liquefaction on Yamal is competitive with Australian gas, then the Vladivostok plant or a European plant would be significantly more competitive," Alexander Medvedev, CEO of Gazprom Export, said in an interview.
"We will earn more money", he said.
Medvedev said the granting of export rights to rivals would not hurt Gazprom, provided ground rules are established. Putin has said a condition of liberalization is that non-Gazprom LNG should go only to the growing markets of Asia, not to Europe, where Gazprom earns most of its revenue.
"It would be a pretty strange thing for Russian gas to compete with Russian gas, although we are not afraid of competition and compete with other suppliers," Medvedev said.
"We need to figure out what kind of volumes will end up on the market. If we are talking about Yamal, its target market is southeast Asia," Medvedev said.
He said exports of gas by pipeline would not be opened up to rivals.
"I don't think it will even be discussed," Medvedev said.
Medvedev played down prospects for a deal to deliver pipeline gas to China, adding that Gazprom CEO Alexei Miller's assurances a deal could be reached as early as September reflected hopes that "thinking makes it so".
He said price, the main sticking point in 15 years of talks on a pipeline gas deal, remained an issue and that previous reports that an agreement had been reached on prepayment by the Chinese side were incorrect.
"When we agree the price we will agree prepayment," he said.
He rejected suggestions that Western hub prices could serve as a benchmark for Chinese or other Asian gas deliveries.
Gazprom favors the regional oil-linked benchmark, the Japanese Crude Cocktail (JCC), the basis for deliveries to Asia from Sakhalin-2, Russia's only functioning LNG plant, which is operated by Gazprom with partners Royal Dutch Shell and Mitsui.
Some analysts say the potential supply from US projects to liquefy natural gas from shale would make US spot pricing a potential benchmark for Asian supplies, but Medvedev rejected the suggestion.
"We don't see any reason to deviate from the JCC."


US unveils new veto threat against WTO rulings

Updated 23 June 2018
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US unveils new veto threat against WTO rulings

  • US tells WTO appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days
  • Trump, who has railed against the WTO judges in the past, threatens to levy a 20 percent import tax on European Union cars

GENEVA: The United States ramped up its challenge to the global trading system on Friday, telling the World Trade Organization that appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days.
The statement by US Ambassador Dennis Shea threatened to erode a key element of trade enforcement at the 23-year-old WTO: binding dispute settlement, which is widely seen as a major bulwark against protectionism.
It came as US President Donald Trump, who has railed against the WTO judges in the past, threatened to levy a 20 percent import tax on European Union cars, the latest in an unprecedented campaign of threats and tariffs to punish US trading partners.
Shea told the WTO’s dispute settlement body that rulings by the WTO’s Appellate Body, effectively the supreme court of world trade, were invalid if they took too long. Rulings would no longer be governed by “reverse consensus,” whereby they are blocked only if all WTO members oppose them.
“The consequence of the Appellate Body choosing to breach (WTO dispute) rules and issue a report after the 90-day deadline would be that this report no longer qualifies as an Appellate Body report for purposes of the exceptional negative consensus adoption procedure,” Shea said, according to a copy of his remarks provided to Reuters.
An official who attended the meeting said other WTO members agreed that the Appellate Body should stick to the rules, but none supported Shea’s view that late rulings could be vetoed, and many expressed concern about his remarks.
Rulings are routinely late because, the WTO says, disputes are abundant and complex. Things have slowed further because Trump is blocking new judicial appointments, increasing the remaining judges’ already bulging workload.
At Friday’s meeting the United States maintained its opposition to the appointment of judges, effectively signalling a veto of one judge hoping for reappointment to the seven-seat bench in September.
Without him, the Appellate Body will only have three judges, the minimum required for every dispute, putting the system at severe risk of breakdown if any of the three judges cannot work on a case for legal or other reasons.
“Left unaddressed, these challenges can cripple, paralyze, or even extinguish the system,” chief judge Ujal Singh Bhatia said.
Sixty-six WTO member states are backing a petition that asks the United States to allow appointments to go ahead. On Friday, US ally Japan endorsed the petition for the first time, meaning that all the major users of the dispute system were united in opposition to Trump.