Pipeliners

MOSCOW, March 3 (RIA Novosti) - Russian Economic Development and Trade Minister German Gref criticizes the North European Pipeline project. Speaking at the session of the government, the minister pointed out a low efficiency of the investments in the construction of this gas pipeline. He also reminded the audience that the development of the North European Gas Pipeline would cost $5.6 billion. "These investments will make it possible to achieve the pumping of 20 billion cubic meters a year," the minister said. In connection with this, Mr. Gref named four strategic obstacles that hamper the development of the gas industry and Gazprom. "The first obstacle is the absence of the determination of strategic investment priorities. The second one is the problem of the existing priorities in the construction of new export-oriented pipeline," Mr. Gref said. The third obstacle, according to the minister, is the non-efficient management of Gazprom. "The production of gas and the development of the deposit are growing slowly, while the market situation is favorable, the export gas tariffs have grown by 31% and the inner tariffs are annually increasing at the minimum by 5% above the inflation level," the minister said. The absence of the medium-term and long-term planning was named by Mr. Gref as the fourth obstacle for the development of the industry. On January 16, 2004, the government of the Russian Federation took a decision to adopt a proposal of the Russian Ministry of Energy and the Gazprom public company, which was coordinated with the interested federal executive bodies, about designing the North European Gas Pipeline. This project opens a new in principle direction for exporting Russian gas to Europe. The pipeline will cross the Baltic Sea from Vyborg to the shore of Germany in the region of the city of Greifswald. The gas pipeline project provides for the construction of sea branch gas pipelines to Finland, Sweden, Great Britain and other countries. In different variants the productivity of the gas pipelines varies between 19 and 30 billion cubic meters a year. It has been planned to begin gas supplies through this pipeline in 2007 and to reach the design output in 2009.