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Gold/Mining/Energy : Gazprom
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To: Copperfield who wrote (33)10/31/2005 8:27:16 PM
From: B O Trust  Read Replies (2) of 45
 
Russia switch to coal - Gazprom profits on exporting more gas

"The Federal Tariffs Service predicts that consumption of natural gas on the Russian domestic market will decrease. Increasing production costs will lead to higher prices and dampen the high consumer demand. Coal will most likely fill in the market niche. Coal prices are rising no faster than the rate of inflation and the risks of increasing costs after the conversion of heating plants from gas to coal will be minimal and the substitution of gas with other forms of fuel will help Gazprom guarantee uninterrupted export deliveries.

The Ministry of Industry and Energy cites several causes for the redistribution of the energy balance toward coal in Russia. First, it is much more profitable to export gas now than coal. The price for natural gas on the external market is rising in conjunction with oil prices, while coal prices are stable. Second, the predicted slow growth of domestic market prices for coal mean a minimal risk of price fluctuations on fuel for generating plants once they are converted to coal.

Experts say that conversion is realistic. The load on existing coal-powered generating plants can be increased while gas-powered plants that were designed for coal and converted to gas in the 1970s and 1980s are taken offline and again refitted for coal.

kommersant.com
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