Oksana Gavshina
Egypt to join gas cartel
With Russia, Qatar, and Iran having agreed upon the establishment of a big gas alliance in October 2008, the big trio has every chance to now grow into a quartet. At a meeting with Russian Prime Minister Vladimir Putin on November 11, his Egyptian counterpart Ahmed Nazif said that Cairo was interested in a constructive dialogue within the Gas Exporting Countries Forum (GECF). According to Mr Putin, the Egyptian delegation expressed willingness to participate in a gas producers' meeting in Moscow on November 18.
Following the Russian Prime Minister, Gazprom CEO Alexei Miller was also assured of the need to transform the forum into a permanent organisation. Abdullah bin Hamad Al-Attiyah, Qatar's Minister of Energy and Industry, said earlier that this transformation could occur within the next few weeks. After his meeting with Alexei Miller and Iranian Oil Minister Gholamhossein Nozari, he said, "I hope we will officially announce the establishment of this organisation at the next meeting of gas exporting countries."
Analysts believe that, with Egypt joining the organisation, its positions will be substantially strengthened. Though Egypt's gas reserves are comparatively small (2.06 trillion cubic metres), it is a noticeable player on the LNG market (it is one of the world's ten largest LNG suppliers). According to Vladimir Revenkov, an expert with the energy department at the Institute of Energy and Finance Fund, within the next few years, LNG will become yet another lever in regulating the global supply and demand on the gas market. "This makes the economic stimulae for coordination of gas exporters' actions all too obvious," he said.
The idea to create a permanent organisation of gas exporting countries was sharply criticised by EU representatives. The EU reacted to this initiative with a statement on a possible change in its energy policy and contacts. Russia regards such scarecrow measures as unjustified. "We are aware of misgivings and even fears voiced by some energy consumers; there are no grounds for such fears," said Mr Putin on November 11. "We are not setting up a cartel or signing a cartel agreement: none of the [forum] members intends to give up, even partially, its sovereignty in decision-making." He emphasised that the countries producing and consuming energy resources must coordinate their actions in order to ensure the uninterrupted supply of hydrocarbon resources to the global market.
Third Attempt
Egypt's Prime Minister also invited Russian companies to participate in tenders for building nuclear power plants. The Rosatom state corporation declines to specify the projects to be built by Russian companies in Egypt and the amount of investments.
Egypt was seriously pondering the construction of nuclear power plants back in the 1980s, but it curtailed all research after the Chernobyl disaster. In 2006, Cairo again announced its large-scale plans to prepare the legislative and technological base for these projects. Egypt planned to build its first nuclear power plant in the El Dabaa area on the Mediterranean coast near Alexandria by 2015-2016. The tentative cost of the project was $1.5-$1.8 billion.
In early 2008, the Egyptian government intended to announce an international tender for the best project for this power plant. The Russian side, which constantly confirmed its readiness to participate in tenders, signed an agreement on cooperation with Egypt in peaceful uses of nuclear energy. "The construction of nuclear power plants in Egypt is quite possible and economically expedient. When the tender in Egypt is announced, we will be ready to announce our participation in it," Rosatom head Sergei Kiriyenko said earlier.
On November 11, Rosatom reaffirmed its intention to participate in Egypt's nuclear plant projects to a Gazeta correspondent, and said that Rosatom would first examine the bids and terms of the tender. Russia is already building nuclear power plants in several countries, including Iran, China, India and Bulgaria.
Stanislav Shubin, an analyst with the Otkrytie (Discovery) financial corporation, believes it would be illogical to look at nuclear plant projects in Egypt only from the point of view of economic profit. "Our energy companies, Inter RAO and RusHydro, are entering other countries' markets thus getting more opportunities to diversify risks. However, politics is even more important here, because Russia is expanding its spheres of influence." Konstantin Reili of the Finam investment company has a different opinion - he believes the main incentive for implementing new projects in Egypt is commercial profit.