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Marcel
Kramer, head of the South Stream, believes Russian gas pipeline
construction plans are driven by economics (South Stream chief seeks
EU level playing field, "FT.com,
February 4). He says: "Russia has many projects to spend its
money on and would not spend it on a pipeline system that might not
be economical."
This is not correct.
Russia does spend money on gas pipelines that are not economical.
Gazprom commissioned one in 2007. The
official purpose of the
Sokhranovka-Oktyabrskaya pipeline (56in, 310km, 80MW
compressor station, total cost more than $1 billion) was
to exclude the transit of Russian gas through Ukrainian territory
while transporting it to consumers in Southern Russia. Note
that Gazprom was paying Ukraine
up to $40 million of transit fees a year. The operating expenses
of the new billion-dollar bypassing pipeline are much higher than
that.
Mikhail Korchemkin
East European Gas
Analysis
Malvern, PA, USA
February 4, 2011
The Financial Times, February 11, 2011
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