New base march 14 2022 energy news issue - 1494 by khaled al awadi

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NewBase Energy News 14 March 2022 No. 1494 Senior Editor Eng. Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Global battery demand to surge by 2030, supply headaches on
the horizon
Rystad Energy
As the energy transition quickens and countries and consumers strive to decarbonize, global battery
demand could surge exponentially and approach nine terawatt-hours (TWh) annually by 2030, 15
times the levels seen in 2021.
Rystad Energy research shows that although global battery demand in 2021 stood at 580 gigawatt-
hours (GWh), more than double 2020’s total, global supply was still able to keep up. However, that
is set to change in the coming years as the appetite for battery technologies in passenger vehicles
and stationary storage grows significantly, straining the supply chain.
This demand projection is in line with a 1.6-degree global warming scenario and the changes
required to energy systems. It is also unconstrained by any potential supply issues. In terms of
components, lithium-ion batteries will dominate the market this decade, although sodium-ion battery
demand will materialize by 2030.
Passenger electric vehicles (EV) will be the most significant contributor to future battery growth,
accounting for about 55% of total demand by the end of the decade. Demand for these batteries is
expected to hit 4.9 TWh by 2030, more than 13 times higher than 2021’s comparatively tiny total of
373 GWh.

Stationary storage will be the next-most significant contributor, with a projected demand of more
than 2.5 TWh in 2030, 29% of the total market. The need for storage is set to soar from 139 GWh
in 2021 because of the more prominent role that volatile renewable energy sources will play as the
world shifts away from fossil fuels.
This will increase the need for electricity to be stored when renewable power output is high to
periods when output falls, such as times when wind speeds are low wind as happened in Europe
last year.
Repurposed EV batteries are a viable option for stationary storage, but they will only start to play a
significant role from 2040 onwards with enough depleted EV batteries only available by then. Light
to medium-heavy commercial vehicles will mainly be electrified in the future, contributing about 1
TWh of demand by 2030.
Electrified aviation and shipping will also have battery needs, but the total demand from these
sectors will not significantly impact the global picture. “Battery demand growth is inevitable as the
energy transition quickens, but global supply will fall short without substantial investment or
improvements in battery technology in the immediate future.
sed on announced targets, battery supply will hit 5.5 TWh by 2030, meeting only about 60% of the
expected demand.
“Gigafactories are being built quickly worldwide, and this supply outlook will likely change. Still, the
importance of these continued investments cannot be understated,” said Marius Foss, head of
global energy systems at Rystad Energy.
Asia, specifically China, will dominate the regional battery demand breakdown by 2030. Under the
1.6-degree scenario, Asian demand will account for 41% of the global battery market, reaching 3.6
TWh.
To meet domestic and international demand, China is targeting 50% of global cell production by
2030, accelerated by the ambitious expansion plans of domestic producers such as CATL, Gotion
High-Tech and SVOLT.
The pressing demand of its domestic market and offtake agreements with several top-tier
automakers globally are driving the steep cell-making capacity expansion planned in the region.
European and North American battery demand will also steadily increase by the end of the decade,
reaching 1.9 TWh and 1.7 TWh respectively. The Middle East and South American markets will
increase significantly too but will not come close to the three largest regions.
Africa’s demand is projected to increase gradually over the next few years, after which it will surge
more than 350% from 50 GWh in 2027 to 227 GWh just three years later.
Several regions are accelerating efforts to develop a domestic supply chain to avoid over-reliance
on battery imports from Asia. North America saw 10 major plant announcements in 2021, seven of
which are part of joint ventures between cell makers and automakers.
Joint ventures comprised about 77% of the newly announced projects in the region last year. In
Europe, battery supply expansion seems motivated by reducing Asian dependence to support
automakers’ plans.
More than half of the planned projects are intended to localize production capacities, with European
cell makers accounting for about a third of total capacity expansions announced last year.

World faces food crisis due to Ukraine war, Russia's fertiliser
and coal king says
Reuters - Guy Faulconbridge
A global food crisis looms unless the war in Ukraine is stopped because fertiliser prices are soaring
so fast that many farmers can no longer afford soil nutrients, Russia's coal and fertiliser king Andrei
Melnichenko said on Monday.
Several of Russia's richest businessmen have publicly called for peace since President Vladimir
Putin ordered the invasion on Feb 24, including Mikhail Fridman, Pyotr Aven and Oleg
Deripaska.
The United States and its European allies have cast Putin's invasion as an imperial-style land grab
that has so far been poorly executed because Moscow under-estimated Ukrainian resistance and
Western resolve to punish Russia.
The West has sanctioned Russian businessmen, including European Union sanctions on
Melnichenko, frozen state assets and cut off much of the Russian corporate sector from the global
economy in an attempt to force Putin to change course.
Putin refuses to. He has called the war a special military operation to rid Ukraine of dangerous
nationalists and Nazis.
"The events in Ukraine are truly tragic. We urgently need peace," Melnichenko, 50, who is Russian
but was born in Belarus and has a Ukrainian mother, told Reuters in a statement emailed by his
spokesman.
"One of the victims of this crisis will be agriculture and food," said Melnichenko, who founded
EuroChem, Russia's largest ammonium nitrate producer, which is based in Zug, Switzerland, and
SUEK, Russia's top coal producer.

Russia's invasion of Ukraine has killed thousands, displaced more than 2 million people, and raised
fears of a wider confrontation between Russia and the United States, the world's two biggest nuclear
powers.
FOOD WAR?
Putin warned on Thursday that food prices would rise globally due to soaring fertiliser prices if the
West created problems for Russia's export of fertilisers - which account for 13% of world output.
Russia is a major producer of potash, phosphate and nitrogen containing fertilisers - major crop and
soil nutrients. EuroChem, which produces nitrogen, phosphates and potash, says it is one of the
world's top five fertiliser companies.
The war "has already led to soaring prices in fertilisers which are no longer affordable to farmers,"
Melnichenko said.
He said food supply chains already disrupted by COVID were now even more distressed.
"Now it will lead to even higher food inflation in Europe and likely food shortages in the world’s
poorest countries," he said.
Russia's trade and industry ministry told the country's fertiliser producers to temporarily halt exports
earlier this month.
PHYSICS STUDENT
Melnichenko, who was just 19 when the Soviet Union collapsed, started out trading foreign currency
while a physics student at the prestigious Moscow State University.
A gifted mathematician who once dreamt of becoming a physicist, Melnichenko dropped out of
university to dive into the chaotic - and sometimes deadly - world of post-Soviet business.
He founded MDM Bank but in the 1990s was still too minor to take part in the privatisations under
President Boris Yeltsin which handed the choicest assets of a former superpower to a group of
businessmen who would become known as the oligarchs due to their political and economic clout.
Melnichenko then began buying up often distressed coal and fertiliser assets. His fortune in 2021
was estimated by Forbes to be $18 billion, making him Russia's eighth richest man.
The European Union on Wednesday sanctioned Melnichenko for Russia's invasion. It said his
attendance at a Kremlin meeting with Putin and 36 businessmen organised by the Russian Union
of Industrialists and Entrepreneurs showed he was "one of the leading businesspersons involved in
economic sectors."
Melnichenko "has no relation to the tragic events in Ukraine. He has no political affiliations," his
spokesman said.
"To draw a parallel between attending a meeting through membership in a business council, just as
dozens of business people from both Russia and Europe have done in the past, and undermining
or threatening a country is absurd and nonsensical," the spokesman said, adding Melnichenko will
dispute the sanctions.
On March 9, Melnichenko resigned as member of the board and non-executive director in both
EuroChem and SUEK, and withdrew as their beneficiary, the spokesman said.
Italian police last week seized Melnichenko's yacht - the 143-metre (470-foot) Sailing Yacht A -
which has a price tag of 530 million euros ($578 million).

Europe’s Newest Reactor to Save a Part of Strained Energy Market
Bloomberg + NewBase
One corner of Europe’s stretched energy market is about to become a lot less dependent on
overseas supplies.
After more than a decade of delays due to licensing and construction snags, Finland started its first
new nuclear reactor in more than 40 years on Saturday. The country has long relied on power
imports from neighbors -- mainly Russia and Sweden -- to keep the lights on, something the new
facility may help to one day end.
Olkiluoto-3 is opening in an era of record electricity costs and will help provide some relief to the
region’s power-hungry industries who keep Nordic economies humming. The energy crisis and
Russia’s invasion of Ukraine show how crucial domestic supplies are, even in typically well-
connected markets.
The Olkiluoto-3 nuclear reactor in Finland.Source: TVO
With Russia becoming increasingly isolated, Baltic network managers earlier this month said
they’re cutting power imports from the country and boosting local output and flows from other
nations. The new facility, which cost Teollisuuden Voima Oyj roughly $6.4 billion, will help Finland
curb flows from abroad by as much as 60% when regular production starts in the summer.
“Above all, the reactor will increase the stability in the eastern region,” said Johan Sigvardsson, an
analyst at Swedish utility Bixia AB. “Finland will get a stronger energy balance and flows to the south
will help the Baltic region.”
• Finland starts its first nuclear reactor in four decades
• That will reduce the nation’s reliance on power imports

Finland imports about a fifth of its power, with flows from Russia peaking at about 15% of
consumption in 2009. Swedish supplies became more prominent after a change in Russian export
tariffs a decade ago.
The European Union plans to wean itself off Russian energy, starting with cutting gas imports by
two-thirds this year. While the fuel keeps flowing, the uncertainty is whipsawing gas and power
prices around record highs. Millions of homes and factories across the continent are facing
unprecedented bills just as other living costs also soar.
While nuclear reactors are hugely expensive and take years to build, they’re a reliable alternative
to wind and solar farms and produce no carbon emissions. Atomic energy is gaining favor elsewhere
in Europe too.
German nuclear operators said they’re open to discussing extending the life of their remaining
plants. In Finland, Fortum Oyj plans to extend the lifespan of its two reactors at the Loviisa plant by
20 years until 2050. But Russia’s key role in a new project means that Fennovoima Oy’s plan to
build a sixth reactor in Finland has for now been suspended.
The U.S. is considering sanctions on Russia’s state-owned atomic energy company Rosatom Corp.,
a major supplier of fuel and technology to power plants and a partner in the Fennovoima project.
TVO said it’s buying fuel for its reactors from “multiple” sources and that commercial relations with
Russia are limited. Still, Rosatom has a large market share and any disruption to its supplies could
roil the global market just as Olkiluoto-3 ramps up.

The start is poised to bring some relief to high Nordic power prices, but it’s difficult to say by how
much. It’s also good news for some utilities and energy-intensive users in sectors including forestry
and chemicals that are co-owners and can access electricity at production cost.
Finland Power Imports
Annual net flows of electricity
Once set to be the world’s biggest reactor, the 1,600-megawatt Olkiluoto-3 facility became a poster
child of a nuclear industry promoting itself as a stable and virtually emissions-free power source as
renewables expanded. Construction began in 2005, but huge cost overruns and disputes between
the operator and builders saw the start delayed many times.
The new reactor “is a big boost,” project director Jouni Silvennoinen said. “For Finland, we will
increase our nuclear production significantly and it is an important contribution to our CO2-free
electricity share.”

U.K: Oil & Gas Fracking Why Has The Ukraine War Put It Back
Alexandra Rogers + NewBase
Russia’s invasion of Ukraine has reignited talk that fracking — a practice that is currently banned in
the UK — could be back on the cards. Ministers have said the conflict in Ukraine means that the
UK needs to wean itself off Russian oil and gas, as prices soar and fears mount that Vladimir Putin
could turn off the taps to Europe.
Boris Johnson will soon set out a new energy strategy to end all dependency on Russian
hydrocarbons. One way for the UK to become self-reliant for its gas supply is to lift the ban on
fracking — something Tory MPs on the right of the party are agitating for as a way to ease the cost
of living crisis.
But some, including business secretary Kwasi Kwarteng, remain sceptical that lifting the moratorium
on fracking is the right thing to do.
What is fracking?
Hydraulic fracturing, known as fracking, is a process in which water and chemicals are injected into
rocks at high pressure to extract gas and oil.
Production giants like Cuadrilla believe vast quantities of shale gas may be hidden underneath shale
rock surfaces across the UK, giving the country access to an untapped energy resource.
Why is it controversial?
Fracking faces huge opposition in some areas after a trial at a site in Lancashire triggered a mini
earthquake with a magnitude of 2.8 in 2019, forcing Cuadrilla to halt its work.

On top of this, campaigners argue that the drilling process could force carcinogenic chemicals into
the atmosphere, potentially contaminating drinking water.
Kerry McCarthy, the Labour MP for Bristol East, told HuffPost UK: “Frackingwould completely
undermine our climate commitments and there is also a significant risk of air and water pollution.
“It also wouldn’t come close to supplying the level of gas needed to stabilise energy prices — it
would be far better to invest more in renewables.”
Are there any benefits to fracking?
According to Forbes, fracking in US has contributed to a gas boom that has pushed down energy
prices and provided greater energy security.
Fracking, as a more certain domestic supply of gas, could also cushion the UK from geopolitical
shocks like the one we are currently experiencing.
Building new sites could also create new job opportunities and boost the economy.
How likely is it that the fracking ban will be lifted?
Kwarteng insisted that the UK’s position on fracking had not changed.
“The government has always been clear that we will take a precautionary approach and support
shale gas exploration if it can be done in a safe and sustainable way. That remains our position.”
A further bump in the road to any potential easing of the ban is the opposition it faces in local
communities across the country.
As many fracking sites are located in the north of England, there are fears that local opposition could
damage the Tories in red wall seats.
Will it solve the cost of living crisis here in the UK?
Not in the short term, according to Kwarteng.
In a recent Twitter thread, he said: “Additional UK production won’t materially affect the wholesale
market price.
“This includes fracking – UK producers won’t sell shale gas to UK consumers below the market
price. They’re not charities.”
“We’ve spoken out against fracking — it is clear it is not something that has public support and we
don’t see it as a solution to the current problem.
“As the business secretary has himself said,
increasing exploration is not going to deal with
the crisis that we have at the moment.
“If you look at the average timeframe from a site
being identified to it actually being developed, it
is something like 28 years on average, so an
increase in exploration is not going to deal with
the current crisis.”

India:Coal’s Comeback Shows Scale of Climate Challenge
Rajesh Kumar Singh
Coal’s share in India’s power mix rose after five years of declines, underscoring Prime Minister
Narendra Modi’s challenge to overhaul the nation’s energy sector and meet climate goals.
The fuel contributed 69% of the country’s total electricity generation in the first 11 months of the
fiscal year to March, compared with about 68% a year earlier, Bloomberg calculations based on
data from the Central Electricity Authority show. Power output from the fuel was at a record during
the 11-month period, rising more than 10% over the year.
With international energy prices surging amid Russia’s invasion of Ukraine and the rupee recovering
from a record low, the government is under pressure to produce more coal domestically. Key coal
markets have hit record highs with buyers from Asia to Europe wary of taking cargoes from Russia,
the world’s third-biggest exporter of the fuel.
“When the power demand is strong, India will have to continue depending on coal for several years,”
said Debasish Mishra, a Mumbai-based partner at Deloitte Touche Tohmatsu. “We are likely to see
an acceleration in domestic production in the near-term, although in the long-term such price shocks
strengthen the case for a clean-energy transition.”

High seaborne prices have also affected generation at coastal power plants that rely on imported
coal, adding to demand for domestic supplies. India, the world’s third-biggest emitter of greenhouse
gases, plans to zero out emissions by 2070.
To reach that goal, the country plans to build 500 gigawatts of clean power capacity by 2030 and
reduce the emissions intensity of the economy by 45% from 2005 levels. While setting these more
ambitious transition goals at the COP26 climate summit in Glasgow last year, the nation joined
neighbor China in resisting global action to phase out coal and had the language diluted to a “phase-
down.”
The country has argued that a knee-jerk exit from coal could deprive millions of its citizens of access
to affordable energy. India’s renewable power market has grown more than threefold over the past
eight years to 106 gigawatts, accounting for more than a quarter of the country’s installed generation
capacity. Other sources of clean electricity, such as hydropower and nuclear, have been slow to
catch up, ensuring coal’s dominance.

NewBase March 14-2022 Khaled Al Awadi
NewBase for discussion or further details on the news below you may contact us on +971504822502, Dubai, UAE
Oil prices extend losses ahead of Fed meeting
Reuters - Emily Chow
Oil prices shed as much as $4 a barrel on Monday, extending last week's decline as diplomatic
efforts to end the war in Ukraine were stepped up and markets braced for higher U.S. rates.
Brent crude futures were last down by $3.05 or 2.7% at $109.62 a barrel at 0351 GMT on Monday.
U.S. West Texas Intermediate (WTI) crude futures eased $3.10 or 2.8% to $106.23 a barrel.
Both contracts have surged since Russia's Feb. 24 invasion of Ukraine and are up roughly 40% for
the year to date. Russia and Ukraine gave their most upbeat assessments after weekend
negotiations, suggesting there could be positive results within days. read more
Oil price special
coverage

On Sunday, U.S. Deputy Secretary of State Wendy Sherman said Russia was showing signs it
might be willing to have substantive negotiations over Ukraine, even as Moscow was intent on
"destroying" its neighbour while Ukrainian negotiator Mykhailo Podolyak said that Russia was
"beginning to talk constructively." Russia's invasion, which Moscow calls a "special operation," has
roiled energy markets globally.
"Oil prices might continue moderating this week as investors have been digesting the impact of
sanctions on Russia, along with parties showing signs of negotiation towards ceasing fire," said Tina
Teng, an analyst at CMC Markets.
"As markets had priced in for a much tighter supply from February to early March, the focus is
shifting to the monetary policy in the upcoming FOMC meeting this week, which could strengthen
the USD further, and pressuring on commodity prices," Teng added.
The U.S. Federal Open Market Committee meets on March 15-16 to decide whether or not to raise
interest rates.
U.S. consumer prices had surged in February, leading to its largest annual increase in inflation in
40 years, and is set to accelerate even further as Russia's war against Ukraine drives up the costs
of crude oil and other commodities. read more
The Federal Reserve is expected to start raising rates this week, which would put downward
pressure on oil prices. Oil prices typically move inversely to the U.S. dollar, with a stronger
greenback making commodities more expensive for foreign currency holders.
Brent has already lost 4.8% last week and U.S. WTI fell 5.7%, both posting their steepest weekly
decline since November. That was after both contracts hit their highest levels since 2008 earlier in
the week on supply concerns after the United States and European allies considered banning
Russian oil imports.

The U.S. later announced a ban on Russian oil imports and Britain said it would phase them out by
year-end. Russia is the world's top exporter of crude and oil products combined, shipping around 7
million barrels per day or 7% of global supplies.
"The Russia-Ukraine situation is very fluid and the market is going to be sensitive to developments
on this front. Suggestions that parties may be willing to negotiate is likely weighing on prices
somewhat," said Warren Patterson, head of commodity research at ING.
"In addition, growing COVID cases in China will raise concerns over demand. China is seeing its
worst COVID outbreak in more than two years. The city of Shenzhen has gone into lockdown, whilst
other cities are also seeing tougher restrictions."
While China's case count is far lower than those in many other countries, its "zero-COVID" stance
has led government authorities in affected regions such as the southern tech hub Shenzhen and
northeastern province Jilin to impose targeted lockdowns, conduct mass testing and suspend public
transport to suppress contagion as quickly as possible.
Shale Drilling Climbs Most in Month as Biden Calls for More Oil
David Wethe
Shale explorers returned to growth mode this week, adding the most rigs in a month as the Biden
administration calls on them to unleash more crude to offset a ban on Russian oil.
The number of rigs drilling for crude in the U.S. rose by 8 to 527 this week, the biggest gain since
Feb. 11, according to Baker Hughes Co. data released Friday. Most of the expansion, which follows
last week’s drop of 3 oil rigs, came in the world’s busiest shale patch, the Permian Basin of West
Texas and New Mexico.

President Joe Biden has urged U.S. oil companies to step up production as sanctions on Russia
have helped push oil prices above $100 a barrel. West Texas Intermediate crude, which was already
rallying before the war, is now 66% up since early November.
The plea for more production collides with commitments that major shale explorers have made to
prioritize financial discipline over growth, though, and many are wary given Biden’s historic hostility
toward fossil fuels and the risk that new drilling won’t pay off over the long term.
Drilling activity, which has become more efficient over time by allowing explorers to do more with
fewer rigs and less spending, remains more than 20% below pre-pandemic highs.
The rig count is a closely watched metric because it’s indicative of future crude production. The
relationship is imperfect, however, because of the time lag between drilling a well and commencing
production. Most of the growth in the rig count over the past year or so has been from the closely
held explorers looking to boost output in order to seek offers to get bought out.

NewBase Special Coverage
The Energy world –March -14 -2022
CLEAN ENERGY
Russia's War In Ukraine: The Beginning Of The End Of An
Energy Superpower?
By Todd Prince + NewBase
Energy Giant, Russia decision to invade Ukraine is backfiring on Russia's energy industry -- the
core of the country's economy -- as Europe doubles down on efforts to diversify away from Russian
oil and natural gas and Western firms flee the country.
Over the past two weeks, Germany, Europe's largest economy, has shelved a new gas pipeline
from Russia, announced plans to build ports for super-chilled gas from other countries, and raised
the possibility of extending the use of nuclear and coal-fired power plants.
Meanwhile, BP, Shell, and ExxonMobil, three of the largest Western energy companies, have all
announced they are pulling out of multibillion-dollar energy projects in Russia while France's
TotalEnergies said it would halt new investments.
As European countries move to cut back on Russian supplies, the exodus of Western cash and
know-how will inevitably lead to the delay or cancelation of energy projects in the country, impacting
future output, analysts have warned.

"I think this is the beginning of the end of Russia as an energy superpower," Nikos Tsafos, an energy
analyst at the Center for Strategic and International Studies, said on the Washington-based think
tank's podcast published on March 1.
Russia's potential loss of gas sales into the European market will not be fully made up for by
increased exports to China, he said.
Russia is the world's third-largest oil producer and second-largest natural-gas producer and has a
strong position in Europe, where it accounts for 25 percent of the oil and 30 to 40 percent of the gas
supply. Overall, Moscow has been a reliable energy supplier to Europe since the Soviet era, despite
the period of Cold War confrontation, the collapse of communism, wars, and recessions.
Its relationship with Berlin has been particularly tight over the years. Germany has viewed Russian
natural gas as a bridge in its energy transition from coal and nuclear to solar and wind power.
'Something Broke'
Despite persistent U.S. protests, Berlin stood its ground and moved ahead with Nord Stream 2, the
Kremlin-backed pipeline that would double Germany's imports of Russian gas. Putin's unprovoked
invasion of Ukraine has fundamentally ruptured those energy bonds with Europe and Germany, in
particular.
German Chancellor Olaf Scholz said this week the country would "change course" to overcome
Russian energy dependence and halted the $11 billion pipeline, which was expected to be launched
later this year. "Rightly or wrongly, there's a view in Europe that says, if we do not consume
hydrocarbons Russia's ability to do this will diminish," he said, referring to Russian aggression. "That
is a widely, widely held view in Europe."

"This relationship has been through a lot and yet something broke over the last week. The tolerance
that Europeans have for depending on Russia has just changed overnight," Tsafos said.
Putin has been the driving force of Russian energy policy since the turn of the century, even taking
part in price negotiations with governments and helping cut deals with foreign investors.
Little-known before the late 1990s, Putin became president in 2000 and consolidated power,
enjoying popularity as world oil prices rose and surging domestic production fattened budget coffers.
He soon brought much of the private domestic oil industry under state ownership -- including by
bankrupting Yukos and jailing its billionaire owner, Mikhail Khodorkovsky -- and fought off oligarch
efforts to dismantle the state's monopoly on pipeline exports.
Putin has used Russia's dominant position in natural gas in Europe as political leverage, including
to keep former Soviet states like Ukraine and Moldova within his sphere of influence.
Putin's move to punish Ukraine in 2006 and 2009 with higher gas prices for its Westward-leaning
policies led to the first export disruptions from Russia to Europe. His offer of cheap loans and gas
to Ukrainian President Viktor Yanukovych in 2013 to prevent Kyiv from signing an economic
Association Agreement with the EU sparked protests that drove Yanukovych from power.
Though Western governments created exceptions for Russian energy, a host of firms -- from banks
and trading houses to insurance companies and shippers -- are still turning down transactions with
Russian oil and liquefied natural gas amid concerns over the risks involved, including possible
reputational damage.
Surgutneftegaz, one of Russia's largest oil producers, failed three times in the past week to find
buyers for 6.4 million barrels of oil despite a tight market that has pushed prices to eight-year highs.
Russian oil producers are selling their output at a discount as large as $18 a barrel, according
to Energy Intelligence, an industry publication.

As a result, oil exports from Russia could fall by 1 million barrels per day (bpd) through June, Rystad
Energy, an Oslo-based research firm, said on March 3. That would deprive the country of about $12
billion in revenue over that period based on current oil prices of more than $100 a barrel. Russia
exports about 7 million barrels of oil and oil products a day.
Russian oil companies could be forced to cut production because the country doesn't have enough
storage to hold the oil it is struggling to sell, Rystad Energy analyst Louise Dickson told RFE/RL.
Arctic Dreams Dead?
The sanctions, though, will also have longer-term effects on Russian oil production and sales.
State oil giant Rosneft, headed by close Putin associate Igor Sechin, is developing the massive
Vostok Oil project in the Arctic that was expected to produce and export as much as 2 million bpd
by 2030.
Vostok is the biggest oil project to be undertaken in Russia since the fall of the Soviet Union. To
finance its development -- which will require tens of billions of dollars -- Rosneft last year sold stakes
in the project to foreign global-commodities traders. Rosneft is now likely to struggle with securing
financing and technology for Vostok's development as Western firms exit.
Overall, Western oil-field-service companies have orders representing about a quarter of all oil and
gas investments in Russia, according to Rystad. "Should those contractors leave the country, it will
undoubtedly cause delays and disruptions to ongoing operations," the research firm said. Rystad
said Vostok "will be slowed and some Russian projects might be canceled altogether."
Russia could also face problems upgrading its oil refineries due to Western technology sanctions,
Dickson said. Russia exports more than 2 million bpd of oil products.
'Wake-Up Call'
Europe is moving quickly now on its energy-diversification plans amid concerns Russia could cut
gas supplies as the "economic war" -- as some EU officials have called it -- deepens.

Denmark has already given approval for construction of a pipeline to bring Norwegian gas to Poland
after permission was suspended last year. Poland relies on Russia's Gazprom for about half of its
gas needs.
In the coming week, the EU will propose measures to expand renewable energy at a faster pace to
replace Russian gas. "We need to get independent from Russian gas, oil, and coal. Our resolve to
go forward in this case is stronger than ever," European Commission President Ursula von der
Leyen said on March 3.
Richard Morningstar, a former U.S. special envoy for Eurasian energy and an analyst at the Atlantic
Council, a think tank, told RFE/RL that as part of a strategy to diversify from Russia, European
states should reconsider their plans to shut down nuclear power plants. Germany is scheduled to
shut down its remaining nuclear power plants by the end of this year, while Belgium is targeting
2025.
Morningstar said Europe should also take steps to enhance energy efficiency in addition to sourcing
gas from other suppliers. "Energy efficiency in both short and long term is going to be tremendously
important. Europe understands that it has to take serious action," he said, calling Putin's war a
"wake-up call" for diversification.

Political crises have motivated developed countries to change their fuel sources in the past, Tsafos
said, pointing to the oil crisis of the 1970s. During the 1973 Arab-Israel War, Arab members of the
Organization of Petroleum Exporting Countries (OPEC) imposed an oil embargo on countries that
supported Israel, causing prices to quadruple and hurting the global economy.
Tsafos said governments in developed economies began to perceive oil as a "fundamentally unsafe
and unstable commodity" and cut its role in their fuel supply, turning more to coal and nuclear power.
The same could happen to Russian energy. "Whatever the energy landscape looks like in Europe
over the next 30 years, the appetite to integrate Russia into that market right now is zero," he said.

Less 'Geopolitical Punch'
Rystad says Europe could replace most imported Russian gas this year with liquefied natural gas
(LNG) and other energy sources including coal, nuclear, and hydropower, though it said such a
switch would be expensive and ambitious.
Russia exported 155 billion cubic meters (bcm) of natural gas last year to Europe by pipeline from
its fields in Western Siberia.
If Europe succeeds in significantly cutting Russian gas imports in the coming years, Moscow will be
in a tough position because it has no other market for that gas, analysts say.
The West Siberian fields are not connected by pipeline to China, a fast-growing gas market. Russia
is seeking to build a new pipeline that would carry 50 bcm from the West Siberian fields to China by
2030. Russia currently supplies just 10 bcm to China by pipeline from fields in Eastern Siberia,
though that is expected to increase to 38 bcm by 2025.
Russia would potentially lose not just export volumes but some of its global influence amid such a
reorientation of exports.
"Selling energy to Asia doesn't give the same sort of geopolitical punch that selling energy to Europe
does. It is an alternative, but it's a second-best alternative for Russia," Rystad said.

NewBase Energy News 14 March 2022 - Issue No. 1494 call on +971504822502, UAE
The Editor:” Khaled Al Awadi” Your partner in Energy Services
NewBase energy news is produced Twice a week and sponsored by Hawk Energy Service – Dubai, UAE.
For additional free subscriptions, please email us.
About: Khaled Malallah Al Awadi,
Energy Consultant
MS & BS Mechanical Engineering (HON), USA
Emarat member since 1990
ASME member since 1995
Hawk Energy member 2010
www.linkedin.com/in/khaled-al-awadi-38b995b
Mobile: +971504822502
khdmohd@hawkenergy.net or khdmohd@hotmail.com
Khaled Al Awadi is a UAE National with over 30 years of experience in the Oil & Gas
sector. Has Mechanical Engineering BSc. & MSc. Degrees from leading U.S.
Universities. Currently working as self leading external Energy consultant for the GCC
area via many leading Energy Services companies. Khaled is the Founder of the
NewBase Energy news articles issues, Khaled is an international consultant, advisor,
ecopreneur and journalist with expertise in Gas & Oil pipeline Networks, waste
management, waste-to-energy, renewable energy, environment protection and
sustainable development. His geographical areas of focus include Middle East, Africa
and Asia. Khaled has successfully accomplished a wide range of projects in the areas
of Gas & Oil with extensive works on Gas Pipeline Network Facilities & gas compressor
stations. Executed projects in the designing & constructing of gas pipelines, gas
metering & regulating stations and in the engineering of gas/oil supply routes. Has drafted
& finalized many contracts/agreements in products sale, transportation, operation & maintenance
agreements. Along with many MOUs & JVs for organizations & governments authorities. Currently dealing
for biomass energy, biogas, waste-to-energy, recycling and waste management. He has participated in
numerous conferences and workshops as chairman, session chair, keynote speaker and panelist. Khaled is
the Editor-in-Chief of NewBase Energy News and is a professional environmental writer with over 1400
popular articles to his credit. He is proactively engaged in creating mass awareness on renewable energy,
waste management, plant Automation IA and environmental sustainability in different parts of the world.
Khaled has become a reference for many of the Oil & Gas Conferences and for many Energy program
broadcasted internationally, via GCC leading satellite Channels. Khaled can be reached at any time, see
contact details above.

New base march 14 2022 energy news issue - 1494 by khaled al awadi

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New base march 14 2022 energy news issue - 1494 by khaled al awadi