Mishustin’s magic button: Premier turns gas pipelines to Russia

By | September 8, 2020
Mishustin's magic button: Premier turns gas pipelines to Russia

Mikhail Mishustin’s Far Eastern tour showed the supreme power a number of acute regional problems, which on paper look like dry statistics. On the spot, things are completely different.

That is why it is important for federal officials not to lose touch with the “land” by making regular visits to the regions. Following the results of his Far Eastern trip, Mishustin has already formed a number of instructions that will be implemented by the profile vice-premiers.

However, one problem deserves special attention, since it is relevant for the whole of Russia, and not only for the Far East. We are talking about the gasification of territories. It is no secret that the level of gasification in Russia is about 70%. That is, slightly less than a third of the territories are not provided with cheap energy.

Economically unprofitable
At the same time, one should not engage in populism, declaring that the authorities do not pay attention to this problem, forcing citizens to pay huge sums of money for expensive fuel oil and other fuel.

There are objective reasons for the slow pace of gasification in the country. If the government had a magic button, clicking on which could achieve a quick result in this matter, the Kremlin would certainly use it. The vast territory of Russia is undoubtedly our property. However, it also brings its own costs. A large number of settlements are far from the centers of business activity. It makes no sense to drag thousands of kilometers of a gas pipeline through the tundra or taiga to supply a couple of small towns/villages. This is exactly the case when one can say: “economically unprofitable.” Yes, populists like Nikolai Platoshkin will once again chase away the mantra about evil oligarchs, about the salaries of top managers, yachts/villas, etc., but all this will have nothing to do with the problem described.

Even in the Soviet Union, about which left-populists are so nostalgic, there was no hurry to pull pipelines to remote settlements.

At the same time, pinpoint areas really need to be connected to the main gas pipelines. For example, the city of Krasnoyarsk, which has coal generation. The transition of Krasnoyarsk to gas, firstly, will improve the environmental situation, and secondly, it will not require irretrievable multi-billion dollar investments. But the case of this Siberian city is, rather, an exception to the rule.

Let there be gas
The lack of the possibility of efficient gasification of the entire Russian territory does not mean that the problem should be postponed indefinitely. It is necessary to look for other methods. And, apparently, Mishustin found a similar solution. The development of the LNG industry in Russia opens up new opportunities not only for domestic exports but also for the gasification of a number of regions of the country. First of all, having access to the sea. Construction of LNG terminals and other infrastructure will make it possible to abandon expensive pipeline projects. Of course, the regions of the Far East need this most of all. But we should not forget about the northern territories, which are often neglected.

As a result of his Far Eastern trip, Mikhail Mishustin instructed to work out a project for gasification of the Kamchatka Territory and some districts of the Khabarovsk Territory based on LNG. A fair question arises: what prevented you from doing this before? The answer is quite simple. Until some time, Russia practically did not produce LNG. There were no corresponding plants in Russia, with the exception of Sakhalin-2 with a capacity of 9.6 million tons per year. Now, Yamal LNG (16.5 million tons) has been put into operation, Arctic LNG-2 (18 million tons) is being built, the Obsk LNG (5 million tons) and Baltic LNG (15 million tons) projects are under examination. The implementation of all these projects will allow Russia to enter the top 5 countries producing liquefied natural gas. Accordingly, blue fuel can not only be exported but also go for domestic consumption.

So, in the near future, generation in Kamchatka will be based on LNG. This pilot region was not chosen by chance. In addition to the above-described problem associated with the remoteness of the peninsula, Kamchatka is considered an important logistics hub, where LNG will be transshipped from ice-class LNG carriers to conventional ships with further shipment to the countries of Southeast Asia. That is, the corresponding infrastructure in the Kamchatka Territory is already being built and will be used not only for export supplies but also to meet the needs of the domestic market.