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"We are at the very beginning of the journey"

Alexey Bondar, Director of Primorye branch of the Russian Energy Agency FGBU, on the energy of the macroregion

Global projects in the production and transportation of oil, gas and coal, the construction of manufacturing industries, the creation of TOPs - all this should turn the Far East into the leader of the fuel and energy complex of Russia. Alexei Bondar, director of Primorsky branch of FGBU "Russian Energy Agency" of the Ministry of Energy of Russia, told the EastRussia correspondent about what might prevent the macro-region from becoming the flagship of the domestic fuel and energy complex.

"We are at the very beginning of the journey"
Photo: courtesy of Alexei Bondar
- Alexey Yurievich, what problem do you think is the most relevant for the Far East fuel and energy complex?

- Each branch of the fuel and energy complex is characterized by its own problems. So, in the oil and gas sector, the main development decisions were made in 2011-2013 years, when oil prices were at the level of 130-150 dollars per barrel, and the prospects for project implementation were assessed positively. Now, when prices have fallen to 50-70 dollars, the estimates are not so optimistic. The decisions on each project are taken by the shareholders, and, probably, the main problem for them is how to attract the necessary amount of investments with the changed prices. Most likely, we should expect the transfer of terms for the period when the prices for products will rise.

- And what about the energy projects?

- Unlike oil and gas companies, where operators of projects under normal market conditions and product prices may be of interest to investors, the situation in power plants is different. It is much more difficult for them to attract investments in the framework of regulated activities. The high wear and tear of the energy infrastructure they exploit, the lack of funds in investment programs do not allow closing the actual needs of consumers. As a result, enterprises either do not provide for investments in the development of infrastructure, or we are talking about amounts that are insufficient for major modernization, for example, of electric substations, electric and heat networks.

- Can you give a concrete example?

- In the vicinity of Vladivostok, near the village of Trudovoe, no substation and low voltage electrical networks were built. Although the object was originally included in the investment program, money for energy was not found. The terms were postponed for six years, and as a result, it was completely removed from the investment program on the basis of a court decision. As a result, networks and low-voltage substations in this territory are loaded to 120-150% of the regulatory level. This leads to frequent accidents, and small electric grid companies are forced to pay fines to electricity consumers because they can not connect objects. Also in this area, for seven years now, they are trying to connect a new residential neighborhood "Sunny Valley of Vladivostok" to electricity. It was assumed that a new substation would provide it with electricity. It was supposed to be built back in 2013 year, but then the power engineers planned the construction of a new CHP, but it did not start there. Justified by the fact that there are more important tasks for which it is necessary to direct funds, rather than points of growth in Vladivostok. And this is not an isolated situation. And the development of energy infrastructure should always go ahead of schedule.

- In addition to the lack of investment programs, are there any other negative factors hampering the development of the fuel and energy sector?

- It is worth mentioning the uncoordinated strategies for changing fuel balances at the regional level. As a significant part of the municipal energy sector has operated on liquid fuels, it continues. But in fact the regions of the Far East came natural gas.

If we talk about the objects of municipal energy, owned by municipalities, the main problem here is the lack of qualification of property owners. In the administrations of municipalities there are no specialists capable of preparing tender documentation for attracting investments for the modernization of boiler houses, thermal and electric networks. As property owners, they must formulate policy documents for the development of engineering infrastructure, for holding a tender and concluding a concession agreement. Municipalities should be helped to hold competitions and transfer their property to concession companies that, firstly, can competently operate it, and secondly, they can attract investments for modernization, as it is stipulated in the agreement. The issue of improving the skills of specialists in the administrations of settlements and districts is very acute.

- Perhaps this problem should be solved at the level of legislation?

- The federal authorities have prepared the necessary regulatory framework, all the necessary laws have been adopted. There are no outstanding issues here. They are much more at the regional level, because they are operators of work in both small and large energy. You can not blame someone for your failures, you just have to work within the framework of decisions taken. For the development of municipal energy and energy infrastructure, the Government of the Russian Federation proposed a mechanism for infrastructure mortgages. If it is applied competently, the infrastructure restrictions for the development of the territories of the Far East will be removed.  

- Recently, analyst Alexander Fack wrote a scandalous report on Gazprom's investment programs, where he came to the conclusion that the construction of the "Siberia Power" gas pipeline does not make sense. One of the main arguments: China may subsequently reduce gas purchases, and then investments in the development of the Chayanda and Kovykta fields, in laying the gas pipeline and the construction of the Amur Gas Processing Plant will not be justified. Fack stressed that gas consumption in China is growing more slowly, and its sources are growing. How do you think, how justified are these fears?

 "Even if the volumes of gas consumption in China fall, this will not make the" Siberia Power "project meaningless. After all, its end point is not China. If it were a question of laying a gas pipeline to this country, then really, it would become a monopolist, like any other consumer in this situation. When the pipe has already been laid, it dictates the conditions: I want to - I take it, I want it - no. But, I repeat, the end point of the "Force of Siberia" is not China, the gas pipeline will be laid to a gas processing enterprise in the Amur Region and a gas-liquidating plant in the Primorsky Territory. And liquefied natural gas can be supplied to any place. Will not take the Chinese in the northern and central provinces - there will be other buyers in southern China. Japan has a great need for gas, interest in participating in gas projects is shown by India, South Korea, Malaysia ... This scheme has already proved its efficiency in the Sakhalin fields, where gas is extracted, liquefied and delivered to any location in Japan, for example Japan.

In addition, the laying of the "Force of Siberia" should not be considered solely from the point of view of gas exports and the growth of direct revenue from its supplies. Laying the gas pipeline will allow gasification of boiler rooms in the regions of the Far East, through which it will pass. Increasing the level of gasification will open up opportunities for launching new industries, creating new jobs ... Similar projects are a powerful stimulus for the development of the Far East's economy.

- Is it possible to say that major investment projects and creation of TOP have already brought the fuel and energy sector of the region to a new level? Or while still it is a question of distant prospects?

 - Since the Russian president set a global task - to deploy the vector of development of the country to the East - not much time passed. This is not a task that can be solved in a year or two. This is a course of development for decades to come. And the process of real change is just beginning. If there were more conversations five or six years ago, agreements were signed, but there were no actual changes, then in the last two years we see concrete cases. TORs are created, large construction sites are being built, roads are being laid .. Changes are clearly visible everywhere, in all regions of the Far East. And this is only the beginning, everything is still ahead.

Yes, the external economic situation has worsened, sanctions have been introduced, the turnover and customs revenues have declined. Now the main thing is that all parties - authorities, project operators and financial institutions - remember what they agreed upon when they signed the agreements. It is important that all parties move in a coordinated direction, regardless of the changing political and economic risks and changing market conditions. Risks are always: prices fall and are restored, sanctions are introduced and canceled. All this is important only in the short term, and we are talking about projects designed for decades. If the risks appear, you need to quickly find ways to circumvent or neutralize them, and continue to move forward. The main thing is do not be afraid to work and remember that we are at the very beginning of the journey.
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