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Russia - Nov 7

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Russia set to double gas prices for Georgia

Tom Parfitt, Guardian
Russia is likely to more than double the price of natural gas to Georgia in a fresh sign of disintegrating relations with the former Soviet state. The planned hike echoed the cutting of supplies to Ukraine during the "gas war" in January and in a calculated snub was made public as Georgian foreign minister, Gela Bezhuashvili, visited Moscow in an attempt to smooth relations following a spy scandal last month.

Moscow has increasingly used energy prices as a means of punishing hostile states in its former sphere of influence that are orienting themselves towards the EU and the US.
(2 Nov 2006)
Related from MosNews:
Georgia Sees Political Motives in Russia’s Move to Double Gas Price

Russia Reacts Angrily to U.S. Warnings over Baltic Sea Gas Pipeline

On Thursday, Nov. 2, the Russian Foreign Ministry angrily criticized a U.S. diplomat’s warning to the European Union that a prospective gas pipeline under the Baltic Sea could further increase its energy dependence on Russia. The Foreign Ministry was referring to the interview given by U.S. Deputy Assistant Secretary of State Matthew Bryza to the Financial Times newspaper.

MosNews has reported on the interview, which was published on Sunday, Oct. 29. In the interview Bryza said: “If you live in Germany you do not want to go through what happened last winter with Ukraine. I wonder as a U.S. official how much diversification anybody can develop by having more pipelines into the same supplier.”

Bryza was referring to the new North European Gas Pipeline, which Russia’s natural gas monopoly Gazprom is currently building in cooperation with Germany’s BASF and E.ON. The pipeline will bypass Poland and the Baltic states, going directly from Russia to the Baltic Sea coast of Germany.

The Russian Foreign Ministry fired back on Thursday, saying that the EU’s energy security hinged on Russian gas supplies.
(3 Nov 2006)

Russia faces chilling prospect of winter short of gas

Arkady Ostrovsky, Financial Times
St Petersburg this month gets a badly needed new power station. Russia’s second-largest city is booming and is desperate for more generating capacity. But the $500m plant may not work. There is no spare gas to fire it.

Despite having the world’s largest gas reserves and portraying itself as an energy superpower, domestically Russia faces a shortage of gas. Gazprom, the dominant gas supplier that frequently doubles as a Kremlin foreign policy arm, is not producing enough for an economy growing at more than 6 per cent a year.

...Gazprom’s three biggest fields, which account for three-quarters of its output, are in steep decline, the one large field it has brought on stream since the end of the Soviet era is reaching its peak and overall gas production is virtually flat.

...Meanwhile demand for gas - from Unified Energy System, Russia’s electricity monopoly, as well as from expanding industrial companies and households - is growing at about 2.2 per cent annually, according to a recent report by UBS. If this growth rises to 2.5 per cent, “the risk of supply crisis is real”, the Russian arm of the Swiss bank says.

...The shortage has international implications, too. It means Gazprom will not be able to increase gas supplies to Europe, at least in the short term - something that European countries are increasingly aware of and concerned about.
(6 Nov 2006)
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