Gas Pipeline and effects to Ukraine

[OlgaH]

Thank you, Dan.

[wxman]

 Do you say it by your own expirience? Don't keep the eggs for so long time and don't buy more than you can eat, and also don't forget to check expiry date  

I think we should ask all those who gave their money to Bernie Madoff. Now that's one stinky basket! Kinda like the chemical they add to natural gas to make it smell. 

[Admin]

I think we should ask all those who gave their money to Bernie Madoff. Now that's one stinky basket! Kinda like the chemical they add to natural gas to make it smell. 

Mercaptan.

One of the first plants I worked on was a mercaptan production plant in Beaumont, TX. They produced, and loaded, mercaptan into rail cars once a week. The odor was overwhelming during production.

I know. Another  interruption.

Cheers!

- Dan

[OlgaH]

I think we should ask all those who gave their money to Bernie Madoff. Now that's one stinky basket! Kinda like the chemical they add to natural gas to make it smell. 

wxman, why all eggs in one basket will all eventually start smelling rotten?  

I think it would be interesting for you to read  

Don't put all your eggs in one basket

The are two proposed origins of the phrase. One of them comes from a legend when King William II of England had requested hard-boiled eggs for the festival in anticipation of the birth of his second daughter. The courtier had consulted the Bishop of Sussex the night before. The bishop prophecized based on a dream he described that he should perhaps separate all the eggs to be served at the birth ceremony in different chardons, or baskets, or there may be a catastrophe at the birth ceremony. The courtier failed to heed his warning and subsequently when a servant knocked over a chardon, all the eggs were lost.

The second proposed origin is derived from the Easter Bunny. During the Seven Years' War (1756-1763), due to shortages in food in England, many households could not afford to make Easter eggs. Back then, Easter eggs were not chocolate, but actual eggs. Eggs that were made were instead sent to the soldiers so they could consume (though eggs were considered a luxury and were only given to commissioned officers, rather than all the soldiers). One commander, whose battalion was the recipient of such eggs had made the fatal error of concentrating all his artillery close together in one adhesive unit in the Shenandoah Valley during the Battle of Minorca. Because the artillery commanders are commissioned officers, many "easter eggs" were lost, because he had put them all in "one basket". This is another proposed source for the term.
http://en.wikipedia.org/wiki/Don%27t_put_all_your_eggs_in_one_basket

[SANDRO43]

I think it would be interesting for you to read

VERY interesting, although I fail to see the possible connection between:

One commander, whose battalion was the recipient of such eggs had made the fatal error of concentrating all his artillery close together in one adhesive unit in the Shenandoah Valley (in West Virginia) during the Battle of Minorca (a Balearic island in the Mediterranean).
(unless he had VERY long-range guns, of course ).

And one adhesive unit is what, a platoon armed with glue-throwers, or a sticky unit that a commander cannot shake off ?

[Misha]

I absolutely agree with you about Europeans' business skills. 

BTW 8 months ago the oil price  was $127.35 so the gas price should be $749.24. 

Well, nobody is going to sign a long-term contract for natural gas at $800 when they know in a couple of months it will be selling for $200 or less   

[OlgaH]

VERY interesting, although I fail to see the possible connection between:

Sandro, as you have noticed they said "The second proposed origin is derived from the Easter Bunny".  and a name of the commander also was lost with eggs 

[SANDRO43]

Sandro, as you have noticed they said "The second proposed origin is derived from the Easter Bunny".  and a name of the commander also was lost with eggs 

Olga, that piece from Wikipedia sounds more like April Fool than Easter Bunny. Tsk, tsk, your 3rd slip in 2 days, a "Slip of the Quote" .

[OlgaH]

Well, nobody is going to sign a long-term contract for natural gas at $800 when they know in a couple of months it will be selling for $200 or less   

Misha, because market gas price is "flexible".   I was trying to find where the loose formula came from   I couldn't, may be you can...

I found "NATURAL GAS Factors Affecting Prices and Potential Impacts on Consumers"
http://www.gao.gov/new.items/d06420t.pdf and I could not see any formula of gas price that is based on a price of the oil as a  factor. May be you know some more reliable sources of the formula.

An old article (2006)
Gas prices for Ukrainian consumers will rise from $110 up to $130 per 1,000 cubic meters (without VAT and transport expenses) since July 1. Such decision will follow the agreement in accordance with which Gazprom is to buy natural gas at the Russian-Kazakh border for $140 per 1,000 cubic meters compared to current $50, Kommersant newspaper informs.
http://www.regnum.ru/english/643921.html

You can look the Oil prices in July 2006 here: http://www.nyse.tv/crude-oil-price-history.htm

[OlgaH]

Olga, that piece from Wikipedia sounds more like April Fool than Easter Bunny. Tsk, tsk, your 3rd slip in 2 days, a "Slip of the Quote" .

Sandro, it really doesn't matter was it April Fool or Easter Bunny  What does matter is the eggs that were lost 

[Misha]

I found "NATURAL GAS Factors Affecting Prices and Potential Impacts on Consumers"
http://www.gao.gov/new.items/d06420t.pdf and I could not see any formula of gas price that is based on a price of the oil as a  factor. May be you know some more reliable sources of the formula.

When the price of crude oil goes down, the price of natural gas invariably follows. One reason: "Some large-volume customers (primarily industrial consumers and electricity generators) can switch between natural gas and oil, depending on the prices of each. Because of this interrelation between fuel markets, when oil prices fall, the shift in demand from natural gas to oil pushes prices  downward." Simply put, you won't burn natural gas if you have a much cheaper alternative.

Source: http://tonto.eia.doe.gov/ask/ng_faqs.asp#price_factors

[OlgaH]

Simply put, you won't burn natural gas if you have a much cheaper alternative.

Misha, thank you for the link, but such factor as the combustion of natural gas emits less carbon dioxide than oil and coal, should be also taken into account. It is additional expenses for tax on emissions.

[OlgaH]

The Gazprom price for Belarus is $129 per 1,000 cubic meters.

Gazprom bought 50% in the country's pipeline monopoly Beltransgaz in 2007 

[kievstar]

The problem is the people of Ukraine can not pay market price for gas.  Ukraine wants to have a price like Belarus.  In order for Ukraine to put pressure on Russia they need to have gas supply to Europe disrupted to get EU's attention.

The politicans of Ukraine need a low price as for the next President election the political party who is deemed by the people as best negotiator with Russia will have an advantage.  Notice only the Western Ukraine politicians are making noise.  Eastern Ukraine politicians are already in bed with Russia and probably paid off to be quiet.  It is also well known in Ukraine that Yulia (nick named in the past - Gas Queen) has shady dealings and makes a lot of money on the side in Ukraine on gas.

Russia needs a high price as the country is burning its cash surplus.  This is just normal business dealings for Russian negotiations.  Will probably need EU to resolve.  End result maybe a higher price but Ukraine will get something in return.  In the end Ukraine and Russia will both benefit and EU will take the hit. 

[OlgaH]

The problem is the people of Ukraine can not pay market price for gas. 

and what about the Ukraine Government they could use the money benefited from illegal arms trade  http://www.newsukraine.com.ua/news/125582/ 

[mendeleyev]

See this link http://www.svitmedia.net/ as it appears that the Ukr public trusts neither the Pres or PM to resolve the situation effectively.  In that top photo they don't look happy (taken at the apartment explosion site a week+ ago).

[OlgaH]

See this link http://www.svitmedia.net/

Party of Regions:
Inability or unwillingness of current Ukraine Government to negotiate with its north neighbor can lead to another menace - to say goodbye to Ukraine's Europe prospect. Europe doesn't need a member, who instead of playing role of a bridge between EU and Russia, creates additional problems in relations between East and West.

Kiev Economic Court has banned Naftogaz from transiting Russian gas to Europe at a price of $1.6 for 1,000 cubic meters per 100 kilometers that is fixed in the contract on the transit of Russian gas through Ukraine until the end of 2010, the Ministry of Fuel and Energy of Ukraine announced.

[55North]

Hardly any of the news reports you all hear will be giving you the real story as to what's going on as the matter is far too opaque to get to grips with.  Just about everyone is being taken as a sucker, except the true insiders on both sides of the border.  Now, get a nice drink, sit down, and read on.....

http://foreignnotes.blogspot.com/2009/01/who-needs-middlemen.html
 
http://europe.theoildrum.com/node/4929#more
 
http://www.twq.com/09winter/docs/09jan_ChowElkind.pdf
 

Now compose a meaningful news report for broadcast.  Impossible, isn't it?

[Shadow]

If only it would be as simple as the story below...

An old friend used to work for your company as a driver, delivering your goods to various clients.
He would buy your goods at a company discount price.
Some years ago, after being pushed by his wife and inlaws, he decided to resign from the company and make his own delivery service.
But he still wanted a discount on the goods which he still needed from you. As it would be impossible to give him the company discount, you decided to raise the prices slowly as his business would rise. That he and his wife were already speaking badly about you to your clients was forgiven.
However you found that he did not pay any of your bills in time, and told him that unless he paid in time he would have to pay interest as was in his contract.
Instead of paying the bills in time, he still paid late and once you decided to stop delivering the good to him, he steals the packages he is supposed to deliver to your clients for his own use, while telling that your price, still below what normal customers are paying, is impossible for him to pay.

Who wants to do business with this guy ?

[wxman]

Personally I side with Russia on this issue. Ukraine is in the rears to Russia on past contracts.  In the US, when you fall behind, the repo man stops by. Ukraine is lucky the Russian repo man has decided not to take action, yet.

[Misha]

Personally I side with Russia on this issue. Ukraine is in the rears to Russia on past contracts.  In the US, when you fall behind, the repo man stops by. Ukraine is lucky the Russian repo man has decided not to take action, yet.

Actually, Ukraine is (in theory) in arrears to a shell company set up by Russia to be an intermediary in the sale of natural gas from GAZPROM to Ukraine.

[ECOCKS]

The plot thickens.....

Russian gas supplies to Czech Republic halted
Prague Daily Monitor, Tuesday -7.01.2009

Supplies of Russian natural gas to the Czech Republic were halted completely last night, RWE Transgas spokesman Martin Chalupský told journalists Tuesday.

[Shadow]

The plot thickens.....

Russian gas supplies to Czech Republic halted
Prague Daily Monitor, Tuesday -7.01.2009

Supplies of Russian natural gas to the Czech Republic were halted completely last night, RWE Transgas spokesman Martin Chalupský told journalists Tuesday.

According to the Russian news channels, Ukraine has stopped all transit of gas to Europe. Note, its Ukraine who have stopped the transit.

[kievstar]

Regarding Ukraine being behind on payment - people need to read the contract on payment terms.  How many companies pay bills the same day they receive product? Do people on this board know which month or months are delinquent?   For example most companies pay between 30 and 120 days after they receive the goods they ordered.  Seems the big problem is the legal contract has limited language on payment terms and services to be performed.  Should also have language that calculates the price to be paid and shows enough detail so no disputes.  Russians love to negotiate and my past dealing with all Russian and Ukraine companies is very poor written contracts which allows a lot of wiggle room.  Accountants and lawyers are on average of poor quality in these countries and let poorly done deals to happen.

Maybe "Pike" or someone else can comment on legal contracts since he is a well traveled businessman in Ukraine. 

[Shadow]

Regarding Ukraine being behind on payment - people need to read the contract on payment terms.  How many companies pay bills the same day they receive product? Do people on this board know which month or months are delinquent?   For example most companies pay between 30 and 120 days after they receive the goods they ordered.  Seems the big problem is the legal contract has limited language on payment terms and services to be performed.  Should also have language that calculates the price to be paid and shows enough detail so no disputes.  Russians love to negotiate and my past dealing with all Russian and Ukraine companies is very poor written contracts which allows a lot of wiggle room.  Accountants and lawyers are on average of poor quality in these countries and let poorly done deals to happen.

Maybe "Pike" or someone else can comment on legal contracts since he is a well traveled businessman in Ukraine. 

I would think that for a contract of 1.5 billion one would be able to get an above-average lawyer.