www.winne.com/vladivostok/krai.html VLADIVOSTOK/
PRIMORSKY KRAI
Where Russia meets Asia





Mr. Yuri Likhoida

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.
  Read on