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FSUOGM POLICY FSUOGM
Russia's gasification programme
slated to cost $25bn
RUSSIA RUSSIA’S regional gasification programme is revenues,” Novak wrote in article on November
expected to cost some RUB1.9 trillion ($25bn) 9. The gas firm is required to pay 50% of its prof-
The goal is to bring over the next decade, Russian Energy Minister its to the government and its other shareholders
gas to 83% of the Alexander Novak has said, noting that sum is too in the form of dividends.
population by 2030. much for state-owned gas supplier Gazprom to While the dividends are not at risk, Gaz-
bear alone. prom’s returns on invested capital in gasification
Russia wants to bolster the use of gas in are likely to be poor, BCS Global Markets (GM)
order to cut heating bills and reduce emissions commented in a research note. The scheme is
in coal-dependent cities. Krasnoyarsk, with a almost certain to be net present value (NPV)
population of 1mn people, is one such city. The negative, it said.
national weather service estimates that it had the Gazprom has long struggled with non-pay-
dirtiest air of any Russian city in 2018. ment for gas supplies from households and other
The least gasified areas of Russia are Siberia consumers in Russia, which will make it difficult
and the Far East, where many households rely to recoup its investments. Some tariffs are also
on canisters of liquefied petroleum gas (LPG) regulated in a way that makes it hard for Gaz-
for their heating needs. Power plants meanwhile prom to make a return on sales.
mainly run on coal and hydroelectric power. “We think the company will likely be required
The government’s goal is to increase the share to cover perhaps half to two-thirds of the total,
of the population with access to gas from the cur- or $1.7-2.0bn per year, a significant portion of
rent 70% to 83% by 2030, requiring the construc- an annual capex budget in the range of $20-
tion of thousands of km of pipelines. Gazprom 30bn,” BCS GM said. Gazprom was earlier look-
cannot fund the programme’s expense alone ing to raise funds through the sale of perpetual
without “leading to a drop in federal budget bonds.
Week 45 11•November•2020 www. NEWSBASE .com P15
