MONITORING RUSSIA SERBIA RELATIONS - ISAC Fund

As the Russian energy sector is a development engine, it has certainly an interest to remainso. In the previous period, the change of using for investments the money realized from theexport of oil and gas at very high world prices was missed. The realized gas production inRussia in 2007 was lower by 2,2 mld m 3 , compared with 2006. Such a drop (-0,5%) resultedfrom a decreased gas consumption growth rate on the domestic market (1,1% 2007)compared with 3,2% 2006)), but also from a decreased scope of Russian gas exports toEuropean countries (due to a very warm winter).According to the current Russian energy strategy until 2020, a gas production increase of upto 650-670 bcm, and oil of up to 90-100 million tons annually is being planned. By 2015,they are planning to reach an annual gas production of 610-615, and by 2020 of 650-670bcm, by activating new gas fields in the region Nadym-Pur-Tazovsky 9 , located near thepresent energy infrastructure, whereby energy efficiency is being additionally increased. Inthis area, by 2020.g, the production will have reached 500 mlrd m 3 gasa. A critical point offurther exploitation in this region is transport infrastructure. The gas line system reached themaximum of its capacities, 522.2 mlrd m 3 in 2004, for which reason three years later thecapacity dropped to 495mlrd m 3 gas. The bridging of the capacity gap would be possibleonly if Gazprom could find a joint interest with independent gas manufacturers, who wouldbe willing to take part in UGSS - the United Gas Supply System. Russia, with the world'slongest gas line system, (222,000km, with transit gas lines of 153,000km in length) ought tohave invested in it a long time ago, as some 57,7% UGSS equipment is nearing its endand/or are past their shelf life 10 .When Gazprom performed the projection of its gas production until 2020, there was aconcern that the planned scope will not suffice for Europe and Russia. If the non-investmentand/or slow investment trend persists, Russia will have faced serious cuts in power suppliesby 2010 11 .9 Zapolyarnoye field, Pestsoye field, Urengoy field, Medvezhye field, YapadnoPostsovoye field, Yambargfield, Yuzhno-Russkoye field10 The average life duration of a gas line is cc. 24 years or less, as not enough investments have been made inthem. Further, 32600km gas line have been extensively used for the past 33 years and require immediatereplacement.11 Michael Economidies, University of Houston36