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European Bank to organise study on Russian gas supply system reconstruction
The European Bank for Reconstruction and Development, by an agreement reached Friday with GAZPROM - Russia's gas production and transmission company - will organise a major study to reconstruct and upgrade the existing Russian gas pipeline system to improve efficiency and environmental performance.
Jacques Attali, President of the European Bank, said: "Gas is a key sector for the Russian economy and one of its major export earners. This success is due in large part to the sound management and technical competence of GAZPROM. I am confident that the study will lead to improved efficiency, energy savings and substantial environmental benefits."
The study, which will involve the combined efforts of Bank staff from the Infrastructure, Energy and Environment Department, Western and Russian consultants, will be executed over an eighteen-month time period. The first resulting investment projects are expected to be ready for funding by the end of 1993.
The study, estimated at about $9 million, will be funded by grants from Canada, France, Norway, and the United States. The Netherlands and the United Kingdom have also expressed interest in participating in the study. The European Bank will coordinate the funding, negotiate and issue all contracts for hiring consultants and organise the execution of the various components of the study.
The development of the Russian gas transmission system accelerated in the early seventies, due to the Russian oil and gas boom. The focus of investment at the time was on rapid construction of new lines, rather than on achieving optimum economic efficiency. As a result, many of the pipelines, compressor stations and storage facilities do not satisfy today's efficiency and environmental standards.
GAZPROM is the world's largest integrated natural gas producer and pipeline enterprise and provides 30 per cent of Western Europe's gas consumption. It has been given significant management autonomy recently, and has shifted its focus to improving the existing system for better cost effectiveness.
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