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Moscow Reiterates Refusal To Ratify Energy Charter

Russia has refused to ratify it over Europe's demands for access to Russian pipelines for Central Asian states and other countries, which Moscow says will make their natural gas 50% cheaper than Russia's when it arrives in Europe.
by Staff Writers
Moscow (RIA Novosti) Nov 22, 2006
Russia will not ratify the Energy Charter as it stands, because it would damage the country's economic interests, the president's top adviser on EU affairs said Wednesday. The European Union has called on Russia to sign the agreement, which would force it to open up its pipelines to European companies and provide safeguards for investors.

"Russia will not ratify the [Energy Charter] treaty and protocol in their present form, and the European Union knows this very well," Sergei Yastrzhembsky said.

The agreement is set to be a key sticking point at the upcoming EU-Russia summit, which begins Friday in Helsinki. Poland has vetoed EU plans to launch talks at the summit on a new cooperation agreement with Russia, demanding that Moscow first ratify the Energy Charter and end its ban on certain Polish food products.

However, Moscow considers the charter to be skewered in favor of energy importers.

The presidential adviser said: "We find it unacceptable that energy transit tariffs should be the same for domestic and foreign consumers. We cannot accept the loss of our natural advantage as a transit country with a unique, diversified pipeline system, over which we will effectively lose control if we ratify the treaty and the protocols as they stand now," he said.

The Russian foreign minister said earlier Wednesday that Moscow has no intention of ratifying the charter, because it is flawed.

Sergei Lavrov said, "The EU side is aware of the document's flaws. The recent meeting of the Energy Charter signatories shows that our position is receiving more understanding."

The Energy Charter treaty came into force in 1998

Russia has refused to ratify it over Europe's demands for access to Russian pipelines for Central Asian states and other countries, which Moscow says will make their natural gas 50% cheaper than Russia's when it arrives in Europe.

earlier related report
Putin Criticizes Implementation Of His Energy Instructions
Moscow (RIA Novosti) Nov 22 - Russian President Vladimir Putin cracked down Wednesday on the slow rate of implementation of his instructions regarding the power industry. Putin said he gave instructions in October, in particular to specify the energy consumption forecast, to work out a number of normative acts stimulating power industry development and to simplify the permissive procedures at all stages of investment projects' implementation.

"I want to note: almost nothing has been done. There are implementation plans, but there is no final implementation on any item," Putin said, urging the issues be addressed seriously.

However, Putin said the government has done much to develop the power industry. "A number of government programs have been adopted... and WGC-5, which launched an IPO, collected some $0.5 billion, and the result exceeded the expectations greatly," he said.

He also said the 2007 budget envisions the biggest investment for the last 16 years - 45 billion rubles ($1.7 billion) for power industry development.

"Nevertheless, the measures being adopted are not enough," he said.

Prime Minister Mikhail Fradkov earlier said the power industry is hampering Russia's economic development, and that the government should step up its efforts to resolve the sector's problems.

"The power industry is hampering the country's economic development," he said. "We cannot continue to keep silent over this. The government must help [electricity monopoly UES CEO] Anatoly Chubais resolve [the sector's] problems."

Chubais said last month the company will consider reducing the volume of electricity exports during the coming winter to cover the domestic energy shortfall.

A cold spell that hit Russia last winter put a serious strain on the country's power grid, and rising energy consumption this year created a generating capacity shortfall.

"An extremely difficult situation is currently developing in Russia with the shortfall in power capacity," Chubais said. "Given this situation, we are forced to take measures to make maximum use of existing capacity during the autumn-winter [consumption] peak."

Ukraine's energy ministry proposed in late September helping Russia cover its electric power deficit with the spare capacity of its power plants, particularly in the Krasnodar Territory in southern Russia that borders on Ukraine, in exchange for Russian natural gas.

Russia's power sector has undergone radical changes in recent years aimed at increasing the efficiency of power plants and developing the industry by attracting investment. During the restructuring process, specialized structures were created in place of the old vertically integrated companies.

Source: RIA Novosti

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