EU Threatens New Sanctions; Russia Responds with Threats on Natural Gas

Townhall.com ^ | September 9, 2014 | Mike Shedlock

[Kaslin]

The tit-for-tat sanction madness in Europe took a huge leap forward today with new sanctions in the work on Russian energy companies.

Russia responded by threatening to restrict commercial flights over its airspace, by threatening to halt reverse flows of natural gas to Ukraine, and with a threat to reduce gas delivery to Europe.

[thackney]

would it make more economic sense to build an LNG terminal south of the border for export to Europe?

There are challenges to that. First, since Mexico doesn't have enough gas now and is expected to get worse, you have to import even more gas into Mexico, beyond current pipeline capacity and even more than being planned to add.

I worked with a company building and maintaining refinery units in Mexico. Cheaper and faster is not how oil/gas type projects get done, comparing Mexico to the US.

Thirdly, you would add PEMEX taking a cut of the economics, and their fingers get more sticky after the facilities get built.

So while you might imagine the red-tape of the US would make it better to be south of the border, my experience would expect the corruption and incompetence to more than exceed our problems.

[redgolum]

Correct, you need to get below the UEL.

[thackney]

I think NFPA has changed to LFL and UFL these days.

;-)

[redgolum]

After days and days of calculating LEL and UEL’s at Iowa State, I can’t change. It was pounded into my skull in the basement of Sweeney hall.

My old boss used to poke me about that.

[thackney]

I usually type LFL as LEbackspaceFL.