Karma at its best: Russia is playing hardball....What we gained/we lost.

[Flabbergasted]

Explains the Axis of Evil....


The ability of the world to generate sufficient energy supplies depends on the willingness of investors to take huge risks in exploring and developing new oil and gas fields overseas. Often, that development must take place in lands not fully integrated into the modern capitalist economy. When the technical risks are amplified by the addition of the risk of arbitrary government actions, energy development will naturally slow down. Supply will be constrained, and prices will rise even higher.


Russia is in effect muscling in on the highly promising but very expensive natural gas field Shell Oil and its Japanese partners Mitsui & Company and Mitsubishi Corporation have developed off Sakhalin Island, east of Siberia and north of Japan. Much of the construction work is done, but further work has been delayed by administrative considerations. The project had experienced substantial cost overruns.


The Project


Sakhalin 2, as it is known, is an offshore natural gas field, set to purify, cool and condense gas to about 1/614th of its volume at atmospheric pressure, and ship it to Japan , South Korea and the US on highly specialized expensive cryogenic LNG tankers, where the gas will be warmed and fed into distribution via conventional gas lines. LNG projects are of necessity large, expensive, and technically challenging.


The very first large scale LNG project opened in Algeria, in 1964, supplying Britain and France. Since then, large projects have opened in countries like Indonesia, Brunei, Qatar, Malaysia, Nigeria, and others, including the United States.


At present, it is estimated that $22 billion (or more) will be the final cost to complete development of Sakhalin 2, with Shell owning 55% of the project, Mitsui 25% and Mitsubishi 20%. Russia, via its giant monopoly natural gas company Gazprom, has let it be known over the past several months that it wanted a chunk of the project, probably a controlling interest, for itself. In effect, having earlier lured the companies into pouring billions of dollars and huge amounts of effort into the project, once the project appeared to be a success, Russia has moved to grab a bigger share of the pie, previous agreements be damned.

[bananas]

1. link? nt

[Flabbergasted]

2. oops

Here

http://www.americanthinker.com/2006/12/russias_great_gas_grab.html