RFEs GE, GDP and Electr'Consump over 19982006 1998 100%

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RFEs GE, GDP and Electr.Consump over 1998-2006
(1998 100)
Gross Expenditures
GDP
Electr. Consump
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Large-scale Energy Projects of Eastern Russia
Strategic Background and Development Problems

• Dr. KALASHNIKOV Victor
• Head of Research Department
• Economic Research Institute
• Russian Academy of Sciences, Khabarovsk, Russia

The 6-th International Conference Asian Energy
Cooperation Forecasts and Realities September
8-11, 2008 Irkutsk, Russia
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Outline

• Rationale of Northeast Energy Policy of Russia
• Policy Initiatives of Russia for the Development
  of Energy Resources of East Siberia and the Far
  East
• Important Energy Resource and Infrastructure
  Projects in Eastern Russia
• Current status of energy cooperation between
  Russia and the NEA countries
• Problems and challenges facing Russia-NEA Energy
  Cooperation Projects

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Key Aspects for Energy Development in East Russia

• Energy import for NEA is and will be necessary
  and inevitable. Russian energy import is
  important for diversification of energy import
  sources.
• Russia is interested in diversification of energy
  supplies to international energy markets.
  Northeast Asia would be a reliable partner for
  diversifying Russian energy exports.
• Russia has been emphasizing the importance of
  developing Eastern territories. Developing energy
  resource projects support endogenous economic
  growth of the Far East.

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Policy Initiatives of Russia for the Development
of Energy of East regions (1)

• Enhancement of Pacific in national extraction and
  export of oil and natural gas
• The Pacific Region will provide 17-20 of the
  Russian crude oil export (2015)
• The extraction of natural gas will reach 740 BCM,
  with 75 BCM in Eastern regions of the country
  (2015-2017)

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Policy Initiatives of Russia for the Development
of Energy of East regions (2)

• Enhancement of Eastern areas in national oil and
  gas reserves
• Timano-Pechorskiy basin, East Siberia and
  Yakutia, and the shelves of the Barents Sea, the
  Kara Sea and the Sea of Okhotsk are the most
  promising in producing national oil and gas.
• The State Duma adopted the law on the zero rate
  of the royalty for oil deposits in East Siberia
  and Yakutia.
• Preferential royalty for prospecting and
  development of shelf deposits is underway.

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Policy Initiatives of Russia for the Development
of Energy of East regions (3)

• Strategic Principles of Prospecting and
  Developing the Oil and Gas
• In 2006 Russia launched a concept of assets
  swapping between the producers and consumers of
  energy resources.
• The 2006 Law On gas exports identifies the
  regime of a national unified export channel (a
  single agent purchasing natural gas extracted or
  in transit in Russia)
• Under the 2008 Law the mineral resources of
  federal importance can be passed to Russian
  companies for exploration and development without
  any tenders.

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Important Energy Resource and Infrastructure
Projects in Eastern Russia (1)

• Sakhalin-1 and Sakhalin-2 oil and gas projects
  are under production
• East Siberia Pacific Ocean oil pipeline (ESPO
  project). The 1st stage of the ESPO of 30 mln t
  will be completed in the 4th quarter of 2009. FS
  of the 2nd stage of additional 50 mln t is
  underway
• Program on Unified Gas Supply System in East
  Siberia and the Far East (UGSS project Gazprom
  is a national developer of the UGSS project).
  UGSS approved by Russian Government in 2007

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Important Energy Resource and Infrastructure
Projects in Eastern Russia (2)

• Large-scale project of Russian electricity
  exports to China. Targeted export volumes up to
  60.0 bln kWh annually.
• The South Yakutia development project. The energy
  related projects include hydro, hard coal, gas,
  uranium
• Investments are made to some oil-gas deposits for
  exports to NEA Vankor (Krasnoyarsk),
  Verkhnechonsk (Irkutsk), Talakan (West Yakutia).

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Large-Scale Energy Projects in Eastern Russia
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Current status of energy dialog between Russia
and the NEA countries

• Over 2000s the intensity of Russia-NEA energy
  cooperation contacts has been enhancing
• The rate and character of the energy cooperative
  initiative differs strongly among the NEA
  countries.
• Russia-China initiatives are most intensive.
• China strongly prefers active policy on bilateral
  basis
• ROK pursues the policy of NEA energy community
• Japan follows the policy of diversification in
  regional and global context

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Problems in the Development of Russia NEA
Energy Projects (1)

• Real projects development far behind declared
  initiatives and plans
• The project problems are not financial or
  technical in nature. Sakhalin-1, Sakhalin-2 are
  good evidence
• The project problems are strongly related to
  regional and national issues.
• So far no consistent, non-contradictory
  mechanisms of energy cooperation on bilateral
  basis. One of the serious problems is price
  disagreement (in particular in gas and
  electricity)
• In Russia the projects are evaluated from the
  point of general strategic partnership policy and
  strengthening Russian presence in global markets.
  

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Problems in the Development of Russia NEA
Energy Projects (2)

• Actual priorities of Russias energy policy still
  put more weight to European and Central Asian
  areas
• NEA oil and gas export opportunities as a
  strategic resource for Russia under Russia
  European Union energy dialog
• Essential divergence in approaches of Russia and
  NEA to ensure energy security. Assets swapping
  vs. national independence in energy supply
  operations

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Problems in the Development of Russia NEA
Energy Projects (3)

• In Russia there is competition between
  businesses, governmental bodies, and regional
  administrations for extracting benefits from the
  energy resource projects
• The oil, natural gas and hydro reserves in
  Siberia and Far East are rather limited in
  comparison with growing demand of NEA
• Regional governments are concerned about possible
  deficits of energy resources for internal use
  because of energy export priorities. Negative
  experience of Sakahalin-1, Sakhalin-2

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The best practices to Russia NEA energy
project development stimulation

• a comprehensive format of cooperation
  simultaneously involving issues of oil, natural
  gas, coal, electricity, fuel processing
• establishment of strategic alliances for joint
  exploration and development of oil gas fields
  in East Siberia and the shelf of Sea of Okhotsk
• construction of joint infrastructure for energy
  resource transportation
• following assets swapping approach
• joint participation in the Siberia Far East
  regional development projects (in the projects of
  oil and gas processing, electricity-intensive
  production, other industrial development
  activities).

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Thank you for attention!

• Dr. KALASHNIKOV, Victor
• Economic Research Institute, FEB, RAS
• Khabarovsk, Russia
• kalashnikov_at_ecrin.ru