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Archive for the ‘Energy’ Category

Russia alarmed over new EU pact

Posted by Kris Roman on May 22, 2009

EU-Russische top 2009Russian President Dmitry Medvedev has warned the European Union not to turn a proposed partnership with former Soviet countries against Moscow.

Mr Medvedev was speaking at the end of a Russia-EU summit held against a background of deep divisions over security, trade and energy supplies.

He also signalled a new gas crisis may lie ahead, suggesting Ukraine lacks the money to pay for gas Russia provides.

A row over prices severely affected supplies to Europe in January.

The BBC’s Richard Galpin in Moscow says divisions between Russia and the European Union seem to be growing ever wider, and this latest summit, held in the far east of Russia, made that abundantly clear, with little sign of progress on any significant topic.


EU gas import 2009“We would not want the Eastern Partnership to turn into partnership against Russia. There are various examples,” Mr Mevedev told a news conference at the end of the summit.

“I would simply not want this partnership to consolidate certain individual states, which are of an anti-Russian bent, with other European states,” he said.

Moscow has accused the 27-member bloc of creating new dividing lines in Europe by offering closer ties to six former Soviet republics.

The Eastern Partnership Initiative aims to forge close political and economic ties in exchange for democratic reforms.

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Russia starts construction of oil pipeline to China

Posted by Kris Roman on April 28, 2009

Russia started construction of a crude oil pipeline to China, following an agreement between the two countries to exchange loans for oil early this month, a Chinese newspaper reported on Tuesday.

Russia staged a ceremony on Monday in Skovorodino, where the pipeline started in Russia, according to the China Petroleum Daily, which is run by top Chinese oil firm CNPC.

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Analysis: Ukraine-Russia gas dispute

Posted by Kris Roman on March 6, 2009

by John C.K. Daly

The new year opened with Russia halting natural gas deliveries through Ukraine to Eastern Europe and points west, reminding the European Union that its Russian gas imports are hostage not only to bilateral economic disputes between Moscow and Kiev but to Ukrainian domestic politics as well. The stoppage, which began Jan. 1 when Russia first diminished gas flows before halting them completely six days later, directly affected 18 nations during one of Europe’s coldest winters in years.


EU hopes that the issue was resolved by the 10-year contract signed Jan. 18, covering both natural gas supplies and transit issues, have been dashed. Under the terms of the agreement, Ukraine received a 20 percent discount from the fees that Gazprom charged its European customers. While still giving Kiev a preferential rate to EU customers, the short-term effect was to effectively double the rate paid by Ukraine for Russian gas, from $179.50 per thousand cubic meters to $360 per tcm. The rate would be recalculated every three months. Because of the global recession and subsequent downward trend of energy prices, some analysts were predicting that Ukraine’s price by the early summer would fall to $250 per tcm or less. The contract became a political football between Western-leaning President Viktor Yushchenko and Prime Minister Yulia Tymoshenko, who brokered the deal.

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Russia enters LNG market

Posted by Kris Roman on March 2, 2009

lng-plant-bgAnalysis by John C.K. Daly

As the world lurches deeper into recession, the energy markets, especially oil, have been hit by falling prices. As the world retools for a more austere 21st century, one energy source that will continue to rise in prominence is natural gas. For the first time, Russia, currently the world’s leading producer of natural gas, is now poised to enter the liquefied natural gas market, opening an LNG facility in Sakhalin. For Europeans worried about Russia’s reliability as an exporter following its pricing dispute with Ukraine earlier this year, the good news is that its first project is directed at the Asian market.


The primary shortcoming for consumers of natural gas is that the vast majority of it is currently shipped by pipelines. LNG, primarily methane, is produced by compressing and cooling it to minus 260 degrees Fahrenheit, converting it to liquid form, which takes up about 1/600th the volume of natural gas. The LNG is then loaded into special cryogenic tankers, which can transport it anywhere in the world. Upon arrival at an LNG port facility, it is re-gasified and distributed as pipeline natural gas.

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Jordan and Russia sign nuclear deal

Posted by Kris Roman on February 26, 2009

bushehr-power-plant-nuclear-iran-bgRussia has been involved in building a power station in the Iranian Gulf port of Bushehr for the past 14 years. Tehran began testing the 1,000-megawatt plant on Wednesday, saying it could go on line within months.

Russia, which is helping Iran build its first nuclear plant, inked a preliminary cooperation deal with Jordan on Thursday to pave the way for producing nuclear power in the energy-poor kingdom.


Under the agreement, Russia will help Jordan, which imports around 95 percent of its energy needs, build power and desalination plants as well as research centres, Jordan Atomic Energy Commission head Khaled Tukan said.

“A final agreement will be signed in Moscow by the end March,” Tukan told state news agency Petra after signing the deal with Nikolai Spassky, deputy director of the Russian Federal Agency for Nuclear Energy.

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Putin urged to stop Siberia hydro-electric plant

Posted by Kris Roman on February 12, 2009

turukhanskaya-hydroelectic-stationThe massive Turukhanskaya hydroelectic station — which would flood a vast area of forests when the dam is built — is planned to go on line in 2010, in a remote area inhabited by the indigenous Evenk people.

Russian Prime Minister Vladimir Putin must act to halt the construction of a proposed hydro-electric power station in Siberia, environmentalists said Tuesday, citing sociological and environmental concerns.

“The Turukhanskaya construction project was blocked at the end of the 1980s as a result of serious ecological and economic expertise,” Greenpeace Russia spokesman Mikhail Kreindlin said in a press release.

“The rebirth of this project will signify a return to the time of the ‘grand projects’, the blackest period of the ex-Soviet Union’s administrative-command system.”

A broad coalition of environmental groups plans to present Putin with a petition with more than 8,000 signatures demanding that the project — run by Russia’s largest hydroelectric company, RusHydro — be abandoned.

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Russia to build most expensive gas project in history

Posted by Kris Roman on February 9, 2009


Russia’s natural gas giant Gazprom plans to launch its most expensive project ever against the background of the disastrous downfall of its profit. The South Stream pipeline will connect Russia with South Europe along the bottom of the Black Sea by 2015. Plunging oil prices will cut the profits of the state-run monopoly by $19-26 billion, whereas the cost of the new pipeline is evaluated at 24 billion euros. It would be possible to avoid this spending if Gazprom continued its gas transit via the territory of Ukraine. Ukrainian Prime Minister Yulia Tymoshenko already said that Russia has only one goal with its new project – to get under Ukraine’s skin. This does not seem to be likely for it is a highly expensive initiative for Russia.


Experts say that the construction of the new pipeline will cost Gazprom too much under the conditions of the current economic crisis. Gazprom may suffer losses already during the fourth quarter of the current year. The losses of the natural gas giant will cause a serious damage to Russia’s budget too.

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Russian oil production reaches its peak

Posted by Kris Roman on February 5, 2009


By Gregor Macdonald

The United States reached peak oil production in 1971, as forecasted by M. King Hubbert, the Shell geologist. Before that time the US attained a form of glory in its oil age with spectacular discoveries in Texas, a robust industry, strong exports to the rest of the world and lots of free wildcatting. The oil age in the US also gave rise to novels and films, like Upton Sinclair’s Oil and of course George Steven’s vehicle with James Dean, Giant.


Russia appears to have peaked now without enjoying any such glory. Perhaps the promise of Khodorkovsky’s Yukos, which charged out of the gate and looked to deliver on the dream of a modern, efficient corporation was doomed by the oligarchical terms of its founding. Large mega-projects like Sakhalin also succumbed to the vagaries of the State, and now the bloated Gazprom looks more like a portrait of decay than an instrument of power. It’s not just the volatility in the price of Oil and Gas that was the undoing of Russia. It was Russia’s historical propensity to eat itself.

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Analysis: Azerbaijan crucial to gas export

Posted by Kris Roman on February 5, 2009

azerbaijan_mapNo Caspian nation has been more affected by the perfect storm of the global economic bust, Russian-Ukrainian gas disputes and the Georgian-Russian conflict than Azerbaijan. In 2009 Baku will attempt to juggle multiple concerns, from raising exports amid falling prices to remaining on good terms both with Western consumers and its giant northern Caspian neighbor Russia.

Its partner may be none other than Iran.

In the past six months three seismic events have impacted the export of Caspian hydrocarbons — Russia’s five-day conflict with Georgia, the subsequent global economic slowdown and the precipitous drop in energy prices, and last month’s Russian-Ukrainian gas dispute.

For better or worse, Azerbaijan has emerged as ground zero in the covert new Great Game energy war between the West and Russia for domination of both Caspian energy and its transit resources. Caught between the two competing power blocs, last year Azerbaijan began to develop its own variant on Washington’s favorite mantra regarding Caspian exports: Happiness is multiple pipelines. In reality, Baku had little choice, and a policy was instituted during the Russian-Georgian clash that saw Azerbaijan branch beyond using Western routes to begin again shipping oil northward through Russia via the Baku-Novorossiysk pipeline and begin sending oil eastward to Iran. The policy was, in fact, an expedient policy born of necessity, as a mysterious explosion on the Turkish segment of the Baku-Tbilisi-Ceyhan pipeline two days before the outbreak of hostilities had shut down its favored Western export route via Georgia.

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Putin Reaps Praise at Home for Freezing Ukraine (Update1)

Posted by Kris Roman on January 16, 2009

By Alex Nicholson – Bloomberg

Russian Prime Minister Vladimir Putin’s standoff with Ukraine over supplies of natural gas may have angered European Union leaders and denied heat to millions; at home, it’s winning him plaudits.

In turning off gas supplies to Ukraine and Europe, Putin showed Russians that he is in charge as a recession looms, and that the West must treat him as a key player in global energy. He also is pushing for higher long-term revenue for state- controlled OAO Gazprom, and has damaged West-leaning Ukrainian PresidentViktor Yushchenko.

“The more they criticize Putin abroad and the more they fight with Russia, the greater his political weight grows,” said Mikhail Delyagin, an economic adviser to former Russian Prime Minister Mikhail Kasyanov and director of the Institute for Globalization Studies in Moscow.

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Serbia joins Southern Stream

Posted by Kris Roman on December 25, 2008

European Friends of Serbia

RIA Novosti political commentator Andrei Fedyashin

On December 24, Catholic Christmas Eve, the Slavic gas transit system strengthened its position: Dmitry Medvedev and Serbian President Boris Tadic signed several agreements on oil and gas at a meeting in Moscow.

Moscow, Belgrade and the European Union will benefit from Serbia’s participation in the South Stream pipeline, one of the main issues of the Russian-Serbian talks. It was the first thing Medvedev spoke about when meeting his Serbian counterpart at the Kremlin. He ensured that all energy cooperation agreements between Russia and Serbia were designed to guarantee Europe’s energy security.

The pipeline, which is planned to carry 31 billion cubic meters of Russian gas annually, will run from the Russian village of Beregovaya in the Krasnodar Region to Bulgaria and from there to Romania, Slovenia, Hungary and Austria.

Russia and Italy signed their first agreement concerning the South Stream pipeline system on June 23, 2007. The southern branch will carry Russian gas to Italy through Serbia, Montenegro, and even Macedonia.

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Russia, Iran, Qatar to hold regular natural gas dialogue

Posted by Kris Roman on December 21, 2008


Russia and the Persian Gulf states of Iran and Qatar will hold regular discussions on prospects of cooperation in the natural gas sphere, the chief executive of Russian energy giant Gazprom said on Tuesday.

Alexei Miller took part in talks in Tehran on Tuesday with Iranian Oil Minister Gholamhossein Nozari and Qatari Energy and Industry Minister Abdallah bin Hamad al-Atiyah.

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Political implications of Russian-Venezuelan oil agreements

Posted by Kris Roman on July 24, 2008

RIA Novosti political commentator Oleg Mityayev

Many analysts expected Venezuelan President Hugo Chavez, who visited Moscow on July 22, to sign new agreements in military-technical cooperation, but this did not happen.

Instead, a number of Russian oil giants signed promising contracts with Venezuela. They would replace their American counterparts, previously ousted by Hugo Chavez.

Although the flamboyant Venezuelan president has visited Russia more than once since he was elected in 1999, bilateral cooperation was primarily limited to the sale of Russian weapons to Venezuela.

Last June, Prime Minister Vladimir Putin complained that mutual investment was inadequate and urged a broader partnership with Venezuela in the oil-and-gas industry as well as other spheres.

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Russian Pipeline Monopoly Denies Czech Oil Cut Political

Posted by Kris Roman on July 16, 2008

Russia’s pipeline monopoly on Monday denied a cut in oil supplies to the Czech Republic was retaliation for that country’s decision to host a US missile-defence system, Interfax news agency reported.
The cut in Russian oil supplies was the result of a decision by two Russian companies to refine more oil at home instead of exporting it, the deputy head of state-owned Russian pipeline monopoly Transneft was quoted as saying.

“This has no relation to politics. It was purely commercial,” Mikhail Barkov was quoted as saying by the news agency. He said the shortfall was likely to be made up by another Russian company “before long.”

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Russia Becomes Major Uranium Supplier

Posted by Kris Roman on July 16, 2008

Russia has overtaken Niger to become the world’s fourth-largest uranium producer, after Canada, Australia and Kazakhstan. Russia received its new rating in 2007, when it produced 3,527 tons of uranium.
It has ambitious plans to move even further up the league, based on promising deposits in Eastern Siberia and other regions, and opportunities for mutually advantageous cooperation with countries rich in uranium ore.

Today the uranium market is very busy and full of optimism. It is characterized by a high level of monopolization — three-quarters of all uranium is produced by five countries. Having placed its stake on nuclear energy, Russia has left itself no choice but to replenish its uranium reserves under a clear-cut and rational program.

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Iran, Gazprom set to sign cooperation memorandum

Posted by Kris Roman on July 13, 2008

Russian energy giant Gazprom [RTS: GAZP] and Iran’s Ministry of Petroleum will sign on Sunday a memorandum of cooperation in the oil and gas sphere, an Iranian deputy oil minister said.

“Interaction between Iran and Russia in all spheres and especially in the energy sphere is very wide. We expect to further broaden this cooperation in the future,” Hossein Noghrehkar Shirazi said.

Shirazi said a series of discussions would precede the signing of the cooperation memorandum.

Iran ranks fourth in terms of crude reserves after Saudi Arabia, Iraq and Kuwait, as well as fourth in terms of oil production after Saudi Arabia, the United States and Russia. Iran’s proven gas reserves total more than 28 trillion cubic meters.

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Russia’s uranium breakthrough

Posted by Kris Roman on July 10, 2008

RIA Novosti commentator Tatyana Sinitsyna

Russia has overtaken Niger to become the world’s fourth largest uranium producer, after Canada, Australia, and Kazakhstan. Russia received its new rating in 2007, when it produced 3,527 tons of uranium.

It has ambitious plans to mover even further up the league, based on promising deposits in Eastern Siberia and other regions, and opportunities for mutually advantageous cooperation with countries rich in uranium ore.

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Russia Investing In Nuclear Capabilities Not Regular Forces

Posted by Kris Roman on June 25, 2008


by Andrei Kislyakov

Russian three-star Col. Gen. Leonid Ivashov, the president of the Russian Academy of Geopolitical Problems, commenting on Russia’s triad of strategic nuclear weapons, including ground-based missiles, submarines and bombers, said: “We are really worried by what is happening. The mobile Topol-M missile systems are vulnerable to conventional strikes; their mobility is no longer a guarantee of concealment or protection. Rather, they have become a deterrence factor only toward the east.”

U.S. Defense Secretary Robert Gates said in his recent address to officers at Langley Air Force Base in Virginia that Russia was focused on strengthening its nuclear capabilities rather than building up its regular armed forces, which makes maintaining the U.S. nuclear arsenal increasingly important.

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Alexei Miller

Posted by Kris Roman on June 12, 2008

Alexei Borisovich Miller (Алексей Борисович Миллер) is Deputy Chairman of the Board of Directors and Chairman of the Management Committee (CEO) of Russian energy company Gazprom.

He was born on 31 January 1962 to Jewish parents in Leningrad, Soviet Union.

He obtained a PhD in Economics in 1989 from the N.A. Voznesenskii Leningrad Finance and Economics Institute. From 1991 to 1996 Alexei Miller served with the Committee for External Relations of the Saint Petersburg Mayor’s Office under Vladimir Putin.

From 1996 to 1999 he was Director for Development and Investments of the Port of Saint Petersburg. From 1999 to 2000 he served as Director General of the Baltic Pipeline System.
In 2000 Alexei Miller was appointed Deputy Minister of Energy of the Russian Federation, and since 2001 he has served as Chairman of the Management Committee of Gazprom.

In December 2005 Miller was named Person of the Year by Expert magazine, influential and respected Russian business weekly. He shared the title in 2005 with Dmitry Medvedev, Chairman of the board of Gazprom.

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Analysis: Turks eye carrying Kazakh oil

Posted by Kris Roman on June 12, 2008

by John C.K. Daly

Besides Russia, the former Soviet republics that have hit the energy jackpot are all clustered around the Caspian Sea. While Azerbaijan, with the Baku-Tbilisi-Ceyhan pipeline, is already hardwired into the Western economy, Turkmenistan’s potential has yet to be fully developed, and its natural gas exports have been locked in for the foreseeable future first by Russia and, to a lesser extent, by China.

Kazakhstan, while currently relying on the international joint venture Caspian Pipeline Corp. pipeline to Russia’s Novorossiysk port on the Black Sea, nevertheless has plans to diversify its export routes to international markets and in this desire has no more ardent suitor than energy-poor Turkey, angling to position itself as the Caspian’s premier energy hub.

Turkish intentions were made clear May 6 by Turkish State Minister Kursad Tuzmen in discussions with Kazakh Tourism and Sports Minister Temirhan Minaydarovic Dosmuhambetov, who was in Ankara to attend the Turkey-Kazakhstan Joint Economic Commission meetings.

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OPEC blames speculators for rising oil price

Posted by Kris Roman on June 11, 2008

The price of crude oil could hit $US 250 per barrel in the foreseeable future, according to the head of the Russian energy giant Gazprom. In response, the Organisation of the Petroleum Exporting Countries assured the markets that there is no shortage of oil.
Twenty days before France assumes the EU presidency, the stage is set for a burning debate on energy matters.

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Gazprom gets Libyan assets

Posted by Kris Roman on April 30, 2008

President Vladimir Putin discussed energy relations with top managers of the Italian companies Eni and Enel at his Novo-Ogaryovo residence near Moscow on April 2. Eni said it would share its development quotas for Libyan gas deposits with Russia’s Gazprom. Putin described the two countries’ energy relations as a breakthrough.


A year ago Eni and Enel bought several companies, including Arcticgas and Urengoil, at an auction held to sell the assets of bankrupt oil company Yukos, as well as a 20-percent stake in Gazprom Neft, the oil division of Gazprom. They paid $5.83 billion for these assets.

Eni also owns 50 percent of the Blue Stream gas pipeline under the Black Sea (the rest belongs to Gazprom). Enel holds a 59.8-percent stake in the wholesale generating company OGK-5 and a 49.5-percent stake in the Russian power supplier RusEnergoSbyt. Eni is also involved in the South Stream pipeline, which was mentioned at the meeting with Putin as one of the most promising cooperation projects.

The list has now been extended to include asset swap deals between Gazprom and Eni.

Libya has become a highly promising source of oil and gas supplies for Europe now that sanctions against it have been lifted. Its proven natural gas reserves are estimated at 1.49 trillion cubic meters (the fourth largest in Africa after Algeria, Nigeria and Egypt). Libya annually produces 80.1 million tons (588.74 million bbl) of oil and 7 billion cubic meters of gas. It consumes 83 percent of its gas and exports the rest.

Libya is ranked first in Africa and fifth in the Organization of Petroleum Exporting Countries (after Saudi Arabia, Kuwait, the United Arab Emirates and Iraq) in terms of proven reserves of low-sulfur light oil (5.1 billion tons, or 37.48 billion bbl).

Gazprom wants to have a share in Libyan deposits. Last year it bought an exploration and development license for Block 19 there, with gas reserves comparable to the reserves of the South Russkoye gas deposit in the Yamal-Nenets Autonomous Area in the northeast Urals. It plans to invest $300 million in the project within four years.

The gas monopoly acquired three projects in Libya in 2007. In March it signed a production sharing agreement with Libya’s National Oil Corp. for a 10.3-square-kilometer block in the Mediterranean Sea, where it intends to invest $200 million by 2012.

Gazprom also recently received a 49.9-percent stake in two oil concessions from Germany’s BASF under last year’s asset-swap agreements.

Gazprom has long been eyeing Eni’s projects in Africa, which it discussed in 2006, when Eni wanted to buy Gazprom’s stake in the independent Russian gas producer Novatek.

Eni holds a 50-percent stake in the Green Stream pipeline in Libya with an annual capacity of 8 billion cubic meters. It links two offshore deposits in the Mediterranean with Sicily. The Italian company also owns a stake in an LNG plant with a capacity of 3.2 million tons a year, a 33.3-percent stake in the Elephant oil deposit, whose reserves are assessed at 68 million tons (499.8 million bbl), and four exploration and development licenses for deposits in central Libya.

Last fall the Italian concern strengthened its foothold in Libya by agreeing to prolong its contracts for the production and export of oil and gas for 25 years. The agreements also provide for doubling the facility for Libyan gas exports to Italy by increasing the capacity of Green Stream by 3 billion cubic meters (today its annual capacity is 8 bcm) and building an LNG plant with a capacity of 5 bcm.

Eni and NOC are implementing these projects and using the reserves needed for them, such as the Bahr Essalam offshore deposit and the Wafa onshore deposit, on a parity basis.

Apart from the Libyan projects interesting for Gazprom and its oil subsidiary, Gazprom Neft, Eni can offer them cooperation in Egypt, where it owns a stake in an LNG plant in Damietta. The plant’s annual capacity is to be increased to 15 bcm. Eni also owns an exploration license for the El-Bougaz block in the Mediterranean.

During the meeting at Novo-Ogaryovo, Eni CEO Paolo Scaroni outlined the assets his company is prepared to turn over to Gazprom. Apart from power plants in Italy, the Russian company can hope to get a third of the Elephant oil deposit in Libya.

Gazprom’s successful foray into North Africa is worrying Europe, which fears that the Russian gas monopoly will reinforce its already strong presence in the European gas market. Gazprom supplies 25 percent of the EU’s gas and plans to increase its share to one-third.

The Libyan, and possibly Egyptian, projects will secure enough reserves for Gazprom’s emergence on the Italian and Portuguese markets, while the Egyptian assets will help it get a foothold in Spain.

Gazprom will greatly benefit from delivering gas to Europe from North Africa and strengthen its presence in the markets of southern Europe. A share in LNG production in North Africa will greatly contribute to Gazprom’s plans, recently made public, to account for 25 percent of the global LNG market by 2030 and to stop using intermediaries for LNG deliveries to and sales in the United States.

(Igor Tomberg is a senior research fellow at the Center for Energy Studies, the Institute of World Economy and International Relations at the Russian Academy of Sciences. The opinions expressed in this article are the author’s and do not necessarily represent those of RIA Novosti. This article is published with permission from RIA Novosti.)


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Russia plans nuclear project for Kaliningrad

Posted by Kris Roman on April 23, 2008

RIA Novosti commentator Tatyana Sinitsyna

Russian plans to build a nuclear power plant in the Kaliningrad Region have provoked protests from Europeans concerned about environmental and radiological safety.

The plant is intended to ensure the Baltic enclave’s energy security. Russian physicist Anatoly Zrodnikov once said, “The world is now not ruled by the dollar or the euro, but by the joule.” (The joule is a unit of energy measuring heat, electricity and mechanical work named after English physicist James Prescott Joule).

There are many nuclear power plants in Europe, notably in France, Germany, the Czech Republic, Lithuania and Finland.

A nuclear power plant is absolutely necessary for the Kaliningrad Region. It will ensure its competiveness and sustainable development, Sergei Kiriyenko, head of the Federal Nuclear Power Agency, Rosatom, said when signing the framework agreement on the construction of the plant on April 16.

The other signatory was the regional governor, Georgy Boos, who said energy supply was a major headache for the region because gas prices keep rising.

Speaking before regional Duma deputies, Kiriyenko said, “The nuclear power plant is vital for that part of Europe in terms of market and energy security.”

The European Union, and especially Kaliningrad’s Baltic neighbors, do not like the idea of the nuclear power plant. But nuclear power generation seems to be the only solution now in view of the feared global energy crisis. Experts say that energy consumption will double by 2050.

Even such small countries as Albania and Estonia are considering building nuclear power plants. Lithuania, which does not want to part with its energy comfort, is planning to build a new Ignalina plant instead of the old one. The Baltic countries on both sides of the Kaliningrad Region are prepared to pool their funds to finance Lithuania’s project. Finland, which has four nuclear reactors and will commission a fifth one in 2009, has announced its intention to build another two or three reactors.

The EU looks benevolently on its members’ nuclear ambitions, but complains about environmental and other dangers when Russia advances nuclear plans. Twenty-two years after the Chernobyl disaster, the world should have cured itself of radiophobia.

As the saying goes, “once bitten, twice shy,” but the probability of an accident at a modern nuclear reactor is one in a million. Such reassuring figures do little to assuage the public, however.

Russia could simply disregard the opinion of its neighbors, but it respects Europe and its standards – especially since the Kaliningrad Region is surrounded by EU countries.

On the other hand, many EU countries in the Baltic region either already have, or plan to build, nuclear power plants, and so the Russian enclave is located in a hypothetical nuclear risk zone. It can continue to buy energy from neighboring countries at market prices, or build its own nuclear power plant.

Besides, the Kaliningrad plant will provide electricity not only to the enclave, but also to its close and distant neighbors. According to experts, the plant’s two reactors will enable Russia to diversify its foreign trade by selling not only commodities (oil and gas) but also high-tech nuclear generated electricity.

In short, Russia plans to make a strong geopolitical move, and it is probably this that worries Europe most of all.

The planned Kaliningrad plant is similar to the Belene nuclear power plant in Bulgaria, which has been certified by the EU. This should be enough to allay Europe’s fears. But it is also worried by the plant’s huge capacity. After long debates, it has finally accepted the experts’ arguments that a plant with two 1150 MW reactors will be the best choice economically and operationally.

The two twin reactors with common infrastructure will make the plant cheaper and ensure that operation will not be interrupted by routine maintenance shutdowns of one of the reactors.

Experts have estimated the cost of the project at 5 billion euros. Atomstroyexport, Russia’s nuclear power equipment and service export monopoly, will be the main contractor.

This, too, should go some way to allaying European safety concerns. Atomstroyexport is known for working to the highest standards of the International Atomic Energy Agency (IAEA) and European requirements for nuclear projects. It was granted the EUR (European Utility Requirements) certificate for the Belene project.

Foreign investors and nuclear construction companies will be invited to take part in the Kaliningrad project. Russian legislation dictates that the state owns and holds controlling stakes in all nuclear power plants. However, Russia is ready to offer foreign partners, above all European ones, a 49% stake in the Kaliningrad plant, Kiriyenko said.

Several potential partners have already expressed interest in supplying equipment to the plant. Now that the agreement has been signed, talks will be held officially.

As for investment, Rosatom plans to consider the issue thoroughly and hold a tender, even though “some investors have expressed willingness to buy everything without a tender,” Kiriyenko said.

The decision to build the plant was made after a yearlong survey. Since the plant cannot be built on the Baltic coast for geophysical reasons, it will be built inland, on the area of 13.300 square kilometers, some 120 km (75 miles) from the capital city in the east of the region.

The project will be adapted to the site geographically, will take into account possible environmental effects, undergo thorough ecological expertise and will be approved only after public debates.

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Outside View: Why a Russia-Iran gas fight?

Posted by Kris Roman on April 15, 2008

Iran has stepped up its diplomatic activity, suggesting that its conflict with the West over its nuclear program is losing momentum, and the use of military force to settle it is no longer the only option.

Americans, who are preparing for presidential elections, are more concerned about Iraq and the mortgage crisis.

But when analyzing the situation from the Russian perspective, we should remember that Iran has added energy to the quiver of its military and political arrows. Its advance to the global gas market could disrupt the current balance of interests there.

Iran is the world’s fourth-largest oil producer after Saudi Arabia, Iraq and Kuwait, and has the second largest gas reserves after Russia.

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Western fears on Russian energy

Posted by Kris Roman on February 28, 2008


John Thornhill      Financial Times     

A clear majority of west Europeans regard Russia as an unreliable energy supplier but remain resistant to paying more for alternative supplies from renewable energy sources.

An FT/Harris poll found that a majority of respondents in the UK, Germany, France and Italy were opposed to Russian companies investing in their countries – although 55 per cent of Spanish respondents favoured such investment.

Public opinion in western Europe appears sceptical about Russia’s intentions, amid rising talk of a return to cold war tensions, but the country is still viewed as more of a friend than a foe in four of the west European countries surveyed – as well as in the US.

Only Britain, which has recently had some fierce ­diplomatic exchanges with Moscow over the murder in London of Alexander Litvin-enko, an ex-KGB officer, has a markedly more hostile attitude with 60 per cent regarding Russia as a foe.

Even though the western European public appears keen to lessen its dependence on Russian gas supplies, consumers are reluctant to pay much – if any – more for alternative nuclear or renewable energy.

A majority of those with some responsibility for paying their household energy bills say they would pay nothing more for energy coming from renewable sources.

Of those that say they would pay more, the majority would pay only 5 per cent.

About two-thirds of respondents say it is “not at all likely” that they would pay an extra €150 ($220, ?112) a month on gas and electricity bills to cut greenhouse gas emissions. This was the sum the European Commission estimated it would cost each household significantly to increase its use of renewable energy.

Very strong majorities – ranging from 79 per cent in Germany to 92 per cent in the US – favoured a large in- crease in the number of wind farms. There was also overwhelming approval for cutting taxes on lower carbon emission cars.

However, attitudes were far more ambivalent towards nuclear power. A majority of respondents in Italy and the US favour building new nuclear plants while majorities in Spain, Germany and the UK are opposed. France, which has the biggest nuclear industry in Europe, is divided.

The FT/Harris online poll, conducted between January 30 and February 8, questioned 6,448 adults in France, Germany, the UK, Spain, Italy, and the US.


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