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Russian Energy Policy

26.12.2014 22:38

Today Russia is a leader and one of the key-countries on the world energy market. In this situation the USA and Europe can't "stay calm", for sure.

Russian Federation has the largest reserves of shale oil, which are about 75 billion barrels (the whole world has 335). The United States have the second place with 60 billion barrels. China is the third having 32 billion.

Russia provides 12 percent of world oil trade. More than 4/5 of its volumes are transported to Europe, where Russia has 30 percent of business.

The natural gas sector is also dominated by Moscow. 23 percent of world gas resources belong to Russia. And again, about 80 percent of Russian natural gas is bought by Europe.

Today Russia has a unique multibranch gas-transport system and implements a number of projects for supplying world market with natural gas.

There aren't many who enjoy it, especially the USA, who tries to prevent Russia from transporting its energy resources to European countries. That's why the issue of "South Stream" project building is very urgent. The pipeline was meant to be constructed through the Black Sea to the countries of Southern and Central Europe - Bulgaria, Serbia, Hungary, Slovenia and Austria. The end point of this line was planned to be Tarvisio in Italy. Additional branch lines were planned to be constructed to Croatia and Serbia. First gas supplies to these countries were scheduled on late 2015.

But because of a hollow pretext of abnormality of the so-called "third energy pact", approved by the EU in 2009, construction of the "South Stream" met some difficulties. Bulgaria, under the EU pressure, announced that its quitting the project.

It should be mentioned, that EU discrimination along with anti-Russian sanctions introduced "because of" the Ukrainian crisis deprived "Gazprom" of using half of its powers. Because of it the current unprofitability of main Russian energy projects the Russian economy is being undermined.

Another pipeline - "North Stream" - one of key routes of Russian natural gas transportation to Germany, UK, Netherlands and Denmark - is currently in similar situation.

Today "North Stream", which is 1224 km long, is the longest underwater gas line in the world. The gas tunnel lies on the bottom of the Baltic Sea, interconnecting Russia and Germany.

First supplies to the European market were sent in 2011, when the work of the first gas pipe line was launched. The second one was launched in a year's time. Now its efficiency is about 55 billion cubic meters a year. In addition, the projects of the third and fourth gas pipe lines exist, one of them was oriented for UK though today it seems impossible because of US and EU economic sanctions.

Moreover, one of the most important issues of Russian-Ukrainian relations is payment for natural gas. Today the debt of "Ukrainian Naftogaz" is more than 4 billion US dollars. That's why "Gazprom" changed its policy to prepayment in July and also prosecuted Ukraine in Stockholm international arbitrage. "Russia - Ukraine - EU" gas talks were being held since early May, but the sides of conflict still can't find a solution that will satisfy them all.

Therefore Russia has to look for more reliable energy industry partners in the East. This is, first and foremost, China. A 30-year gas supply agreement was signed during Vladimir Putin's official visit to Chinese People's Republic in May 2014. Thus China will receive 38 billion cubic meters of gas a year.

Especially for this issue "Gazprom" started building a gas pipe called "Power of Siberia" which will be more than 4 000 km long. Chayadinskoye and Kovyktinskoye gas fields will be the sources for this new gas line. First delivery is planned for 2018. Russia and China will each invest 70 billion dollars in the project. This project will allow Moscow to reallocate resources, and also it will allow Beijing to lower the energy deficit. At the same time new gas lines from Russia to China are planned to be built through the Republic Altai and Mongolia.

Russia is a leader of constructing power generating units abroad - in India, Bulgaria, China, Turkey etc. thus strengthening its positions in the world nuclear energy too. Furthermore International Atomic Energy Agency experts acknowledged Russian nuclear power plants' power blocks the safest in world. In addition, Russian experts have a huge experience of constructing nuclear power plants in hot climate countries with high seismic activity. Russian stations are able to withstand 9-ball earthquakes. A living evidence is the "Busher" nuclear power plant in Iran, which was built by "Rosatom" specialists.

A no less important aspect of the Russian energetic policy is its participation in six-party talks (Russia, USA, China, France, UK and Germany) and IAEA about Iran's "atom for peace", which are being held since 2003.

Thus Russia's strong energetic potential makes it a serious player on the world energy market. The country is the leader on hydrocarbons market, meanwhile it enlarges influence in nuclear sphere. Russia still has undiscovered reserves of shale gas and oil, which are placed in Russian Arctic shelf which is planned to be opened in the near future. Moscow, relying on cold minded planning, counts on the wisdom and further cooperation of its partners, including EU.

Editorial Staff