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China finally switching to Russian gas

Article in Global Times complains of irregular deliveries of gas from Central Asia; hinting at preference for Russian gas

Alexander Mercouris

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As the giant Power of Siberia pipeline intended to transport natural gas from Yakutia and the Irkutsk areas of Russia to China approaches completion, with Gazprom saying that it is now two-thirds complete, the semi-official Chinese newspaper Global Times has published an article complaining about irregularities in the supply of gas from China’s traditional Central Asian gas suppliers, Turkmenistan and Uzbekistan.

The sharp drop of liquefied natural gas (LNG) shipments through a key Central Asian pipeline network has put the already-tight domestic LNG supply situation to the test.

There are two reasons for the plunging shipments: first, LNG demand increased in the supplier countries themselves; second, the suppliers were withholding LNG in hopes of getting better prices in other markets. Those factors prompted the suppliers to break the terms of their contracts with China.

According to a statement by China National Petroleum Corp (CNPC) issued on January 31, the nation’s LNG supply situation has been deteriorating. The volume of LNG received through central Asian pipeline networks has fallen by nearly half, domestic news portal jiemian.com reported. The sudden cuts by two Central Asian countries, Turkmenistan and Uzbekistan, added a new risk to the Chinese energy supply network. China needs to re-evaluate the security of its energy supply network in Central Asia.

According to insiders at China’s three major State-owned oil companies, the Central Asian countries failed to provide China with the contracted volumes of LNG with the excuse that they didn’t have enough money to repair broken LNG equipment. A notice issued by CNPC stated that Central Asian countries owe China an average LNG volume of 30 million cubic meters per day, according to jiemian.com

Sources also said that China National United Oil Corp is negotiating with these LNG suppliers. But it seems that Chinese oil companies have no bargaining chip if the suppliers don’t keep their end of the deal. Instead of China, the suppliers can potentially send LNG to Europe at a higher price.

The cut in LNG supplies has added a new risk factor to China’s energy security, with domestic LNG inventories at record lows. Data from the Beijing oil & gas transportation center showed that the domestic natural gas pipeline network had “emergency” storage of 1.99 billion cubic meters at the end of January. According to jiemian.com, as of January 30, the volume available for sale in the current pipeline network was 420 million cubic meters per day whereas demand was 445 million cubic meters per day, in addition to the network’s own use of 5 million cubic meters per day. So the domestic supply gas is about 30 million cubic meters per day.

As a result, CNPC must ration the supply and sale of LNG to avoid a total collapse of the LNG pipeline system.

The China-Central Asia LNG pipeline, which starts at the border between Turkmenistan and Uzbekistan on the banks of the Amu Darya River, is one of the world’s longest LNG pipeline. The gas pipeline runs about 10,000 kilometers, with 188 kilometers in Turkmenistan, 530 kilometers in Uzbekistan, 1,300 kilometers in Kazakhstan and 8,000 kilometers in China.

Turkmenistan is the largest pipeline LNG exporter to China. But since January, the gas concern there has shut down supply three times.

If all these figures are true, the risk is obvious: Central Asia has emerged as a broken link in the international energy security network that China has made such effort to forge.

With China participating in globalization as the “world’s factory,” ensuring energy security is vital for China. China has put huge resources (in banking, diplomacy, investment, markets and public finance) and effort into building a five-channel international energy supply network to satisfy the world’s largest oil and gas demand.

As China adjusts its energy consumption structure, switching to green energy, the demand for LNG will constantly grow and create a heavy dependency on foreign resources. The high dependency on LNG from Turkmenistan has become a potential security risk.

If this situation continues, it will not only lead to unexpected problems for State-owned petroleum corporations, it will also leave the Chinese government unprepared. If the key passage of LNG is not stable, the security of China’s international energy supply network must be re-evaluated.

Russia and the Power of Siberia pipeline are conspicuously never mentioned in this article.  Nonetheless Chinese anger and concern about the breaches of contract by their traditional Central Asian gas suppliers is clear enough, as is the urgently expressed need for China to diversify away from them to a more reliable supplier, which can only be Russia.

The article in fact highlights the key role of natural gas in China’s future energy mix.

A visit to Shanghai in August impressed on me the extent to which the disastrous state of air pollution has become a major political and social in China, with China having a pressing need to move towards a ‘greener’ energy mix and to move away from its present over-reliance on coal.

As the article in Global Times shows, natural gas plays a critical role in all this, even as China forges ahead with alternative energy technologies, and a stable and reliable supply of gas to the Chinese energy market is regarded by China as essential for its energy security.

It turns out that the Chinese are finding that the Central Asian states upon which they have up to now relied for their gas are unable to maintain their gas pipeline infrastructure – much of which was built by the USSR – and are not above abusing their monopoly positions in China’s gas market to extort from China a higher price for their gas, even if this involves breaking their contracts with China.

This contrasts with Gazprom, which has a well-earned reputation for being an exceptionally reliable supplier, invariably honouring its gas supply contracts, and having all the technical and logistical resources needed to maintain its gas pipeline and gas transportation infrastructure and network in good working order.

The logic of substituting Gazprom and Russia for the Central Asian states as China’s main source of natural gas is obvious, and the Global Times article both highlights it and hints at it.

The Global Times article highlights a key point about Russian-Chinese economy cooperation.

Though trade between the countries does not approach the volumes of trade between China and the US or the EU, it is rising rapidly, with the two countries having resources which compliment each other.

Moreover Russia looks to be becoming an increasingly important source for China’s energy and raw material imports, as China discovers the difficulty of importing them reliably from elsewhere, and must also worry about US threats to blockade China’s main sea route, the South China Sea.

Russia has already replaced Saudi Arabia as China’s main source of oil.  It looks increasingly positioned to replace the Central Asian states as China’s main source of natural gas as well.

The economic linkages between the two countries are growing bigger and stronger, with their importance to each country starting to transcend their physical volume, as each comes to rely more on the other for the critical imports each needs.

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Mueller Finally Releases Heavily Redacted Key Flynn Memo On Eve Of Sentencing

Alex Christoforou

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Via Zerohedge


Having initially snubbed Judge Emmet Sullivan’s order to release the original 302 report from the Michael Flynn interrogation in January 2017, Special Counsel Robert Mueller has finally produced the heavily redacted document, just hours before sentencing is due to be handed down.

The memo  – in full below – details then-national security adviser Michael Flynn’s interview with FBI agents Peter Strzok and Joe Pientka, and shows Flynn was repeatedly asked about his contacts with former Russian Ambassador Sergey Kislyak and in each instance, Flynn denied (or did not recall) any such conversations.

The agents had transcripts of Flynn’s phone calls to Russian Ambassador Kislyak, thus showing Flynn to be lying.

Flynn pleaded guilty guilty last December to lying to the FBI agents about those conversations with Kislyak.

The redactions in the document seem oddly placed but otherwise, there is nothing remarkable about the content…

Aside from perhaps Flynn’s incredulity at the media attention…

Flynn is set to be sentenced in that federal court on Tuesday.

Of course, as Christina Laila notes, the real crime is that Flynn was unmasked during his phone calls to Kislyak and his calls were illegally leaked by a senior Obama official to the Washington Post.

*  *  *

Full document below…

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The Myth of Western Democracy

British prime minister May has turned Brexit into subservience to the EU.

Paul Craig Roberts

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Authored by Paul Craig Roberts:


How does the West get away with its pretense of being an alliance of great democracies in which government is the servant of the people?

Nowhere in the West, except possibly Hungary and Austria, does government serve the people.

Who do the Western governments serve? Washington serves Israel, the military/security complex, Wall Street, the big banks, and the fossil fuel corporations.

The entirety of the rest of the West serves Washington.

Nowhere in the West do the people count. The American working class, betrayed by the Democrats who sent their jobs to Asia, elected Donald Trump and the American people were promptly dismissed by the Democratic candidate Hillary Clinton as “the Trump deplorables.”

The Democrats, like the Republicans, serve power, not the people.

In Europe we see the squashing of democracy everywhere.

British prime minister May has turned Brexit into subservience to the EU. She has betrayed the British people and has not yet been hung off of a lamp post, which shows how acceptance the British people are of betrayal. The British people have learned that they do not count. They are as a nothing.

The Greeks voted for a leftwing government that promised to protect them from the EU, IMF, and big banks, but promptly sold them out with austerity agreements that destroyed what remained of Greek sovereignty and Greek living standards. Today the EU has reduced Greece to a Third World country.

The French have been in the streets in revolt for weeks against the French president who serves everyone except the French people.

There are currently massive protests in Brussels, Belgium, with half the government also resigning in protest against the government signing a pact that will replace the Belgian people with migrants from Africa, the Middle East, and Asia. The corrupt and despicable governments who signed this pact represent foreigners and George Soros’ money, not their own citizens.

Why are citizens so powerless that their governments can elevate the interest of foreigners far above the interests of citizens?

There are a number of reasons. The main one is that the people are disarmed and are propagandized to accept violence from the state against them, but not to deliver violence in return against the governments’ illegal use of force against citizens.

In short, until the conquered peoples of Europe kill the police, who serve the ruling elite and delight in inflicting brutality against those whose taxes pay their salaries, take the weapons from the police, and kill the corrupt politicians who have sold them out, the peoples of Europe will remain a conquered and oppressed peoples.

Some time past Chris Hedges, one of the remaining real journalists, made it clear that without violent revolution to excise the tumor of government superiority over the people, freedom throughout the West is dead as a doornail.

The question before us is whether the Western peoples are too brainwashed, too firmly locked in The Matrix, to exhausted to stand up and defend their freedom. Resistance is happening in France and Belgium, but the government that sold out Greece hasn’t been hung off of lamp posts. Americans are so brainwashed that they think Russia, China, Iran, Syria, North Korea, and Venezuela are their enemies when it is perfectly clear that their Enemy is “their” government in Washington.

Except for my American readers, Americans are locked in The Matrix. And they will kill in order to stay in The Matrix, where the controlled explanations are reassuring. Anyone who looks to Washington for leadership is an idiot.

Washington is a master of propaganda. Washington’s propaganda has even infected the Russian government, which from all reports stupidly believes that accommodation to Washington is the secret that will make Russia successful.

It is a foolish government that relies on agreements with Washington.

What it comes down to is this: If acceptance of provocations avoids war, that is the correct policy, but if acceptance of provocations encourages more provocations until war is unavoidable, then a more robust response to provocations is the correct policy. A more robust response introduces caution into the process, whereas acceptance of provocations encourages the aggressor.

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Why The Senate Vote To End Yemen War Is So Important

Stopping US participation in this brutal war is by itself a wise and correct move, even if it comes years too late.

Ron Paul

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Authored by Ron Paul via The Ron Paul Institute:


Last week something historic happened in the US Senate. For the first time in 45 years, a chamber of the US Congress voted to pull US forces from a military conflict under the 1973 War Powers Act.

While there is plenty to criticize in the War Powers Act, in this situation it was an important tool used by a broad Senate coalition to require President Trump to end US participation in the Saudi war against Yemen. And while the resolution was not perfect – there were huge loopholes – it has finally drawn wider attention to the US Administration’s dirty war in Yemen.

The four year Saudi war on neighboring Yemen has left some 50,000 dead, including many women and children. We’ve all seen the horrible photos of school buses blown up by the Saudis – using US-supplied bombs loaded into US-supplied aircraft. Millions more face starvation as the infrastructure is decimated and the ports have been blocked to keep out humanitarian aid.

Stopping US participation in this brutal war is by itself a wise and correct move, even if it comes years too late.

The Senate vote is also about much more than just Yemen. It is about the decades of Presidential assaults on the Constitution in matters of war. President Trump is only the latest to ignore Article I, Section 8 of the US Constitution, which grants war power exclusively to Congress. Yes, it was President Obama who initially dragged the US illegally into the Yemen war, but President Trump has only escalated it. And to this point Congress has been totally asleep.

Fortunately that all changed last week with the Senate vote. Unfortunately, Members of the House will not be allowed to vote on their own version of the Senate resolution.

Republican Leadership snuck language into a rule vote on the Farm Bill prohibiting any debate on the Yemen war for the rest of this Congressional session. As Rep. Thomas Massie correctly pointed out, the move was both unconstitutional and illegal.

However as is often the case in bipartisan Washington, there is plenty of blame to go around. The Republicans were able to carry the vote on the rule – and thus deny any debate on Yemen – only because of a group of Democrats crossed over and voted with Republicans. Democratic Whip Steny Hoyer is being blamed by progressives for his apparent lack of interest in holding his party together.

Why would Democrats help a Republican president keep his war going? Because, especially when you look at Congressional leadership, both parties are pro-war and pro-Executive branch over-reach. They prefer it to be their president who is doing the over-reaching, but they understand that sooner or later they’ll be back in charge. As I have often said, there is too much bipartisanship in Washington, not too much partisanship.

Americans should be ashamed and outraged that their government is so beholden to a foreign power – in this case Saudi Arabia – that it would actively participate in a brutal war of aggression. Participating in this war against one of the world’s poorest countries is far from upholding “American values.” We should applaud and support the coalition in the Senate that voted to end the war. They should know how much we appreciate their efforts.

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