At the head of Cadogan Commodities, the company he founded in London in 2014, Frenchman Thierry Rodier is one of the main players in physical energy brokerage. He negotiates the purchase and sale of gas, coal and biomass cargo ships. It is also involved in green energies and the sale of carbon credits.
L’Express: Cutting off the gas tap remains Vladimir Putin’s “secret weapon”. Will he use it?
Thierry Rodier: There is no interest because the Russians would be the first victims. Energy is by far Moscow’s main source of income. However, Russia is already in a catastrophic economic situation due to international sanctions and the devaluation of the rouble, not to mention the flight of economic actors who have gone abroad. Going without the gas manna overnight is of no interest to Putin. That would amount to doing hara-kiri. Our analysts and I believe this scenario is unlikely. Of course, we must remain cautious: no one imagined, either, that Putin would invade Ukraine.
Thierry Rodier, founder of Cadogan Commodities, specialized in physical energy brokerage (gas, coal, biomass)
TR
So, in your opinion, nothing changes?
On the contrary ! War or peace, gas cut or not, it is certain that all players in the sector are busy finding alternatives to Russia. Everyone is looking for supplies of non-Russian coal and gas. The movement is underway and it is inevitable. Unfortunately for them, the Russians will become pariahs of the world in the energy market. Their image is damaged for a long time, a bit like that of Germany and the Germans after the Second World War. It will take a generation to restore trust.
It should also be understood that, in the energy sector, contracts are negotiated on a long-term basis – over five, ten, fifteen years or more. An example: I am currently negotiating with an African producer who is preparing to supply liquefied natural gas (LNG) by cargo to a customer country in Europe. This is a ten year contract. This means that, if signed, this contract will have eluded the Russians for a decade. Poland is another example: it has decided to no longer buy coal on the Russian market, although it is very close… The trend is there, Europeans will buy less and less Russian gas, oil and coal from Russia. ‘coming. So if I was Putin, I would try to sell everything I can now rather than scuttle myself ahead of time by cutting my deliveries now.
Construction of a pipeline to bring Russian gas to Europe, in Anapa, Russia, December 7, 2012
afp.com/SERGEI KARPUKHIN
Once the European clientele has disappeared, what are Putin’s alternatives: China, India?
You cannot compare Europe with these two Asian countries. Russia will never succeed in selling to them the volumes that it has supplied to Europe until now. Let’s not forget that China and India are already customers of Russia and that these countries do not need colossal additional volumes. Moreover, neither India nor China wishes to be entirely dependent on the Russians. On the contrary, these two countries are pursuing wise policies to diversify their supplies. Putting all the eggs in the Russian basket is of no interest to them.
German Chancellor Olaf Scholz announced on Tuesday that he would suspend authorization for the controversial Nord Stream 2 gas pipeline linking Russia to Germany, after Moscow recognized the independence of pro-Russian Ukrainian provinces.
afp.com/Odd ANDERSEN
As for Russia itself, its delivery capabilities are limited. It would have to build additional pipelines to Asia. Which would be excruciatingly expensive. Its coal also faces a problem exporting to the east because the eastern port of Vladivostok can only accommodate ships of 35,000 to 40,000 tons. However, the international coal trade requires rather tonnages of 150,000 to 170,000 tons. There is a bottleneck phenomenon. In short, in theory, export through Vladivostok is possible, but it is not simple.
How can the Europeans organize themselves without Russia?
The first solution is to obtain liquefied natural gas. The advantage of LNG is that it is transported by cargo ship and can therefore come from anywhere. The downside is that it requires specific port infrastructure. Unfortunately, we were slow to diversify our supplies. It would have been wise to invest in gas terminals earlier, but we did not do so because European elected representatives sometimes struggle to plan for the long term. Full of good intentions, they favored renewable energies. The trouble, these are not enough to replace gas, coal and nuclear.
The European Commission recently granted a “green” label to nuclear power and gas, which is now considered a “transition energy”. It’s good. But it would have been even better to do it a few years ago. Be that as it may, the investments are now planned and they will intensify. So much the better. Until they materialize, there is the temporary solution of mobile gas terminals (on ships) which can partly compensate for the absence of gas terminals.
Is there enough energy available in the world to allow us to spend the next winter warm without supplying ourselves in Russia?
That’s the whole question. At the global level, there is indeed a risk of an interruption in the supply of oil, gas and coal, due to Russian or European political decisions. At the same time, demand is strong due to American and Asian growth which, in the medium term, will continue despite the current problems in China. These two phenomena (energy scarcity and growth) push up energy prices. But this is not temporary. Energy prices will indeed remain at a high level. So when industrialists ask us if the current situation is just a bad time to pass, we are forced to answer them: “No, sorry… Expensive energy is the new normal.” This is why, in Europe, we supply ourselves in all directions on all markets and in all areas: gas, LNG, oil, electricity, coal, green energy, hydrogen, coal, nuclear. In summary, we will get by but the price will be high.
Who emerges victorious from this crisis?
Americans, sure. Their economy is hardly affected by the war in Ukraine (the Fed has not revised its growth forecasts downwards) and they are exporters of shale gas. Contracts have already been signed between the major American and German players in order to reduce Germany’s dependence on Russian gas, which is currently 40%.
Another example: for example, there are currently many American players who offer biomass on the European market. The latter was previously supplied in Russia, which was the largest producer of these fuelwood pellets that are sold at service stations. American suppliers are recovering business.