25 March 2012, 00:25

Russia remains an energy superpower

Russia remains an energy superpower

Russia’s natural gas industry is successfully reducing its costs and has no plans to increase the price of its gas for domestic or foreign buyers. Prime Minister Putin spoke about this Friday after touring new energy projects near St Petersburg.

Russia’s natural gas industry is successfully reducing its costs and has no plans to increase the price of its gas for domestic or foreign buyers. Prime Minister Putin spoke about this Friday after touring new energy projects near St Petersburg.

Appearing at a meeting of senior executives in the gas industry, he also emphasized the role of new export pipelines, including the Nord Stream, the first pipe of which has already connected northwestern Russia to northern Germany across the bed of the Baltic Sea: "This pipe has created a direct export route, which reduces the need for precarious overland transit. The second Nord Stream pipe is half-ready and should be completed on time. Once fully operational, the Nord Stream pipeline should pump 55 billion cubic metres each year. Russia remains a reliable global supplier of energy and values its reputation as such. It is also open to partnerships on energy projects, including in fields like investment, the infrastructure and geological exploration".

The Prime Minister also announced that this year would see the start of construction on the South Stream project to pump Russian natural gas to Southeastern Europe through a big-diameter pipeline laid across the bed of the Black Sea.

Mr Putin spoke about what he termed ‘an insatiable appetite’ for natural gas, both at home and abroad: "This year, Russia’s gas sales will beat the pre-crisis record, which was set in 2007. Abundant Russian natural gas will continue to flow to buyers abroad and meet the needs of household, agricultural and industrial consumers at home".

The required cost-cutting will be reached through technological innovation and improvements in management.

Russia’s known reserves of natural gas are at some 50 trillion cubic metres, making it the world’s number one gas power. Geological exploration in Siberia and on the Arctic Shelf is likely to drive the reserves figure even higher.

The efforts and trends in the gas industry that deserve particular encouragement are energy saving, the production of liquefied natural gas, protection of the natural environment and the growth of private natural gas companies.

At present, these companies produce one fourth of Russia’s natural gas. Their share will grow as the government continues to encourage fair competition in the natural gas sector.

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