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VLADIVOSTOK/ PRIMORSKY KRAI
Where Russia meets Asia
Interview with Mr. Yuri
Likhoida, Vice Governor for Oil and Gas of the Primorye
Regional Government
Vladivostok, 14th of October, 2002
Mr. Yuri Likhoida,
Vice Governor for Oil and Gas of the Primorye Regional
Government
Some people are saying that the economy of Primorsky
krai will not be able to grow unless there is an
increase in the energy supply. Do you agree?
Actually it is correct. The energy sector of Primorsky
krai is as poor a position as many people try to
present it. We have a program of energy development
planned until 2010 -2020 years. We are working in
different directions: first - the development of
the fuel base, development of our mining branch
such as local coals, then the second direction is
the construction of an oil and gas complex. We have
supply of coal for 300 years, supply of oil for
50 years. We, the administration of krai, set the
direction of energy development.
Today we produce energy through a coal-dust power
station and we have proposed to convert the electric
power station equipment to gas and liquid fuel in
next 5-10 years. In next 5 years we also plan to
build an steam-to-gas electric station on the base
of Sakhalin oil and gas complex. In 2006, oil and
gas deliveries to Primorsky krai will be started.
For this program we are building terminals for receiving
liquid gas and oil in Primorsky krai.
Konstantin Pulikovsky said that "The forthcoming
winter won't be easy for utility companies in the
Far East.", citing lack of funds for repairs
and modernisation, lack of trained personnel and
a backlog of unpaid bills. How can you solve these
challenges and make the energy system profitable?
We don't have easy winters here. The problem of
Primorsky krai is that we do not have a large enough
quantity of local coal and the energy sector still
depends upon delivered coal. Our demand reached
up to 13 million tons of coal, and 3 million must
be imported from other regions. Yet we have prepared
for this winter: We have enough quantity of coal,
fuel oil and we have fulfilled repair workings.
We have developed the program and in 2 years we
will provide enough local coal for our region. This
year we have one more open-cast mine, " Rakovsky",
which will provide us with 500.000 extra tons of
coal, and next year it will extract about 1 million
of tons. The open-cast mine of "LuTEK"
extracts 6 millions tons of coal. In 2 years we
will develop the needed 13 million tons of coal
on local open -cast mines, which will be sufficient
for us to stop importing coal.
Meanwhile, we are planning at least 5 years ahead
to work with "Sakhalin Energy", as well
as with Siberia oil pipe line and gas pipe line.
Gasification of the energy system is an important
process, and I understand that you expect 90 % of
public utilities to be converted to gas by 2010.
What is the progress so far on this project?
We are planing only partial transformation of electric
stations to gas generation. There are 12 cities
on the territory of Primorsky region and we want
to gasify only 3 of them. The cheapest fuel is still
coal, so we plan on developing coal reserves for
another 20 years to come. We will not transfer energy
for gas entirely, since it is not profitable from
economic point of view. But old coal and dust stations
have to be changed for more up-to date equipment.
You used to be a general manager of Dalenergo,
so you know it well. Recently, the Primorye regional
administration requested to buy 49 percent of Dalenergo
from UES (United Energy Systems). Is this also part
of your plan to re-build and re-structure the company?
During 6 years "Dalenergo" had been working
with great losses. That is why the governor set
the following terms to UES: "If you cannot
solve this problem and make Dalenergo a profitable
company, then you have to sell its shares to the
administration". But this does not mean that
we wanted to buy these shares. The regional administration
is not able to buy 49% of shares. It is very huge
money, so we are pushing in every way to make UES
work more effectively.
This was the situation half a year ago. Now RAO
has improved its work towards "Dalenergo"
But still the most effective management is a private
one and it is provided in the restructuring plan
of UES of Russia.
The next phase of UES is the deregulation of
the energy sector. Do you foresee that some private
companies might take over the ownership of "Dalenergo"?
I have already said that the administration of krai
only sets the direction of energy development, yet
this restructation programme is a component of state
politics. In my view, the prospect that "Dalenergo"
or "LuTEC" might become private is only
encouraged. The private owner is more effective
manager, while government management of production
is not usually as effective. For example, now that
the open cast mine "Racovka" belongs to
a private owner, the results of its work are excellent.
The new structure of UES is currently being reviewed,
and in the program it is provided that electric
power stations, trade and all services that includes
repairing and reparations will be private. The state
will only own transmission facilities and will have
right for day-to-day management.
You are going to supply energy with coal generation,
not only with liquid natural gas, but there through
atomic energy as well. Could you talk about this
project with "Minatom".
The pacific region consists of Primorsky Krai,
China, South and North Korea, Japan and Sakhalin.
We have very good projects together. One of them
is to connect nuclear power stations of China, Korea,
Japan together with hydroelectric stations of Russia
to make link it together into one single complex.
This idea is not new: such kind of energy complexes
work in the West of Russia, in Ukraine, Georgia
and in other regions.
We must do the work of energy sector stable, in
order not to have energy blackouts. Now we are working
together with Khabarovsk and Amur regions. The time
difference between the Vladivostok and Blagoveshinsk
is 2 hours, so the morning starts here, and we direct
electric energy from the Amur region here, then
the loading goes to the West, and we always move
this electric energy to areas where demand is higher.
And we have decided to apply the same principle
to this countries.
In Russia is rather cold in winter, while in southern
countries the highest loading in summer because
of air conditioners use. So in summer we will sell
them energy, and we will follow the same regional
method with day and night: the day starts in Japan,
and it ends here and the difference is 4 hours.
That is why it is very favorable for us to connect
all electric power stations and to work in one energy
space. For these purposes it is necessary to build
a nuclear power station to sell and supply energy
abroad.
Can you confirm that an atomic energy plant actually
be built?
Yes, it will happen. The Vice minister was here
and this idea is being realized under his supervision.
In 2005 we will start planning this project and
it will be realized in 2012 We have the approved
program to develop transmission facilities, which
includes nuclear, wind and hydro power stations.
By 2010 the energy consumption will be increased
twofold. Our program of energy sector is also connected
with program of Khabarovsky krai and the Amur regional
development, which is focused on the development
of the entire Far East.
The building of nuclear power station will solve
the problem for 50 years. And the building of this
station is in accordance with our energy development
plan that has to be fulfilled by 2020. This program
also foresees that 35% of energy will be produced
by nuclear power stations.
The development of nuclear power station is the
future of all countries. Today 3 blocks are working
in Japan and 3 more are being built, while 3 blocks
are being built in South Korea, 6 blocks are being
built in China, and they are being built in India,
Vietnam, Iraq.
We are studying the reasons of Chernobyl's catastrophe,
as we don't want to repeat it here. Progress is
going forward and the energy sector is developing
very quickly. For example: we had steam locomotives,
then diesel locomotive, now we have electric trains.
Where are these steam locomotives? They are in the
museums. It is the same with energy sector - thermoelectric
power stations are steam locomotives, and we have
more modernized technology - nuclear power, which
is the new electric train.
The extracting of coal in big volumes, the modernization
of "Dalenergo", the Primorye Oil and Gas
complex, and the development of nuclear energy...
these are huge projects. What is your strategy to
attract foreign investment?
We have already had a conference with China, Korea
and Japan on these issues, and we hold regularl
meetings on energy supply of the Far East and Pacific
regions. We are familiar with energy problems of
Russia, China, Korea and Japan. Recently we had
APEC forum where we also presented our projects
for nuclear, steam and gas stations, as well as
complex of gasification and oil refinery. French
companies are interested and we began to cooperate
with Japanese companies, such as "Mitsui"
and "Mitsubishi". As for automation, "Siemens"
began close work with us as well. The investor clearly
understands, that these projects are very profitable.
And today I want to underline that there are people
who want to invest in these future projects.
Do you think your position today is the culmination
of your career to improve the energy system in Primorye
?
Yes. It should be a power engineering specialist
who manages the perspective of energy, even in the
administration. It is easier for me to manage this
perspective as I have been trained in Vietnam, Japan,
China and I know this system. Of course, time is
passing and I will also retire eventually, and younger
people will work. But I worked in energy system
for 41 years, and of course this is my profession.
You have already been working as vice governor
during one year. What is your biggest accomplishment
so far?
All of us have managed to stabilize the situation
in the energy system of Primorsky krai and we have
managed to develop fuel power system. So if compare
with last year, we have extracted 2 million more
tons of coal. We have developed and implemented
the program of fuel power complex development for
future perspectives.
Especially I want to stress the positive results
of gasification work, the construction of oil pipe
line, steam-and-gas electric station, and of course
the question of development of a nuclear power station
to benefit the regional energy supply.