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Russia in search of strategic storage of natural gas
Material posted: Publication date: 02-06-2013

Russia's recent steps show the role played by the storage of natural gas in the overall energy strategy of Moscow in Europe. May 22, Belarusian President Alexander Lukashenko signed a decree, which is controlled by the Russian company "Gazprom Transgaz Belarus" is required to increase the capacity of prybuz'ke and Mozyr underground gas storages. Construction and commissioning of these facilities, owing to which storage capacity will increase up to one or even two billion cubic meters planned for the period between 2013 and 2020. This writes the American Internet portal Stratfor.

Lukashenka's decree was published against the background of ongoing attempts of Russia to buy natural gas storage in another former Soviet Republic – Ukraine. Given the changing dynamics of the European energy market is the presence of Russian stores in the path of gas to Europe will determine the position of Moscow on the continent.

Natural gas storage is important for several reasons. Their presence helps countries better manage their natural gas reserves. In addition, they provide energy security to those countries in which gas is a key source of electricity for industry and residential heating.

These countries include most countries in Central and Eastern Europe. In the case of gas supply disruptions and peak consumption contained in the gas storage can serve as a reserve to ensure an emergency supply. In addition, the availability of storage allows countries to purchase additional volumes of natural gas during the summer period when demand is typically lower, and delivery is cheaper. This gas they can sell on the spot market (instead of selling under long-term contracts with the fixed cost) in the winter, when demand and prices higher.

Of particular importance storage idea for Russia, which is one of the world's leading natural gas producers and a major exporter to Europe. Russia and various European consumers across the continent links the extensive infrastructure of pipelines and storage facilities. The presence of these stores has allowed Russia to ensure a stable supply of fuel to European consumers and gave her an important source of income. However, this infrastructure of pipelines and storage facilities in Europe many different owners, with the consequence that the status of these strategic assets often becomes a subject of political debate.

So, in 2011 Russia got full control of Beltransgaz (now renamed Gazprom Transgaz Belarus"), which gave her access located in Belarus storage and pipeline system, which at that time accounted for 20% of Russian natural gas exports to Europe. Because of this, Russia has control over energy supplies through Belarusian territory on their own terms. It also allowed Russia to strengthen its positions on the Belarusian energy market.

According to Lukashenko signed the decree, by the "Gazprom Transgaz Belarus" will be built third and fourth stage of the Mozyr underground storage facilities (to be constructed in aquifers) in the Gomel region. As a result, the storage capacity from the current 150 million cubic meters will be increased to one billion. In addition, the company commissioned to modernize and prybuz'ke storage (will be built in saline formations), which capacity will increase from 400 million cubic meters to 600 million Due to these projects, as well as the Osipovichi storage, working volume of which is about 300 million cubic meters, the total capacity of storage of natural gas on the territory of Belarus will reach two billion cubic meters.

However, Belarus has the potential for storage gas, even if these figures will be doubled, is negligible compared to its southern neighbor of Ukraine. There are 13 storage of natural gas, the aggregate amount of which exceeds 30 billion cubic meters. The presence of such capacity is the main reason for Russia's interest in buying Ukrainian energy company Naftogaz. However, Ukraine is a transit country for the main part of the exports to Europe of Russian gas) has less desire to give Russia its energy infrastructure, than Belarus. Instead, Kyiv has actively sought to develop ties with the European Union and proposes to create a consortium with participation of Ukraine, Russia and the European Union for joint management of the pipeline system and storage facilities. Realizing the strategic importance of its storage facilities and pipelines, Ukraine is interested in granting Moscow partial access to these assets. However, in Kiev do not want to see Russia fully purchased it even in exchange for lower prices for natural gas.

Political and economic disagreements between Russia and the two main transit country of its gas to Ukraine and Belarus have led to disruptions in supplies of natural gas. This was the main reason that prompted Russia to create alternative pipelines, namely Nord stream under the Baltic sea and the planned South stream under the Black sea. But, despite the fact that the creation of the "North stream" (and potentially South stream) allowed Russia to largely avoid dependence on these transit countries, it has not achieved access to stores of natural gas. Given the fact that the Nord stream and South stream are mostly underwater pipelines, they do not solve the Russian problem of lack of underground storage. Moreover, the projects of expansion of storage facilities in Belarus show that the construction of new buildings can take a lot of time and money.

This explains why Russia has bought "Gazprom Transgaz Belarus" and currently increases the volume located in Belarus repositories, and why she continues to get from Kiev (along with other countries of the West, for example, from Hungary) gain access to the extensive infrastructure of its vaults, despite their own projects to develop pipelines. The preservation and promotion of these repositories will represent for Moscow of particular importance, given that in coming years Russia and Europe will face new challenges in their energy relations. Gaining access to stores of natural gas and control over many more years will play a key role in the overall Russian energy strategy both in terms of ensuring the reliable supply of raw materials and as guarantee for the maintenance of growth is dependent on energy exports for the Russian economy.


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