|
Monday, October 30 2006 @ 06:45 AM Central Standard Time
|
Russian concerns that Russian energy giant Gasprom will be unable to supply the required natural gas for this winter’s domestic electricity consumption have prompted a decision to purchase Ukraine’s excess electricity.
Russia cut natural gas supplies to Ukraine in 2005 as part of a move to pressure Ukraine, which rejected an increase in prices.
This time, Russia has demanded Ukraine’s excess electricity because of Moscow’s concern about Gazprom’s ability to supply enough gas for electricity.
Russia's Unified Energy Systems (EES) electricity monopoly is now buying electricity from abroad because it is faced with a severe lack of gas to power its generating plants for the winter.
In October, EES entered into negotiations with the Ukrainian Fuel and Energy Ministry to buy excess electricity.
Moscow agreed to purchase some 6 billion kilowatt-hours from Ukraine to make up for expected shortfalls in western Russia.
In the winter of 2005-2006, Gazprom was forced to briefly limit supplies to Europe in order to keep the lights on in Moscow.
EES head Anatoly Chubais blamed Gazprom, which controls 25 percent of the world's gas reserves and 94 percent of Russia's natural gas, for the potential gas deficit.
Chubais said that Gazprom was unable or unwilling to supply generating companies in Russia with enough gas and this had forced them to buy more expensive diesel fuel to power their plants.
In 2006 the cost of diesel rose by over 85 percent, but electricity prices remained stable.
According to Chubais, the gas shortage makes the present cost of diesel fuel equivalent to $185 per 1,000 cubic meters of gas. EES buys gas from Gazprom at $46 per 1,000 cubic meters.
Gasprom Lacks Investments
Russian experts agree that the reason behind Russia's domestic gas shortage is due to Gazprom's lacking investments and the company's involvement in too many different projects at the same time.
With Gazprom's main gas fields running low, the company are reported to not have enough financing. Instead, the company, which is $38 billion dollars in debt, has concentrated on non-essential activities such as buying European energy companies.
In September 2005 alone, Gazprom spent $13 billion to buy oil giant Sibneft in a bid to transform itself into an integrated energy company.
Chubais believes that the gas market should be liberalized along European lines and that Gazprom's pipelines should be opened to independent gas producers. |
|
