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Gavin Longmuir's avatar

Re your prognostication that the NordStream pipelines will be restored to service in a few years time -- presumably after the current Political Class in Germany has been shown the door. I used to think the same way, but now am having second thoughts.

First, from the geopolitical point of view, Russia has learned that providing the low-cost gas which underpinned Germany's economy was paradoxically NOT a factor which gave Germany's Political Class any reason to hold back from intense anti-Russian activity. Hence, there would be no political security advantage to Russia in restarting NordStream; the only reason for selling gas to Germany in the future would be economic.

Second, the former Russian gas pricing scheme was probably based on providing Russia with its targeted rate of return on its own investment. If Russia restores gas sales to Germany, presumably now their target delivered price would be much higher -- only a small discount to the price of Germany's alternative of importing expensive LNG. At that higher price, Germany may demur.

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