60 Percent Of Russian Gas Pipelines Outdated, Expert Says

A total of 60 percent of all gas pipelines operating in Russia are between 40 and 50 years old, a manager at a Russian gas equipment repair company has said, flagging concerns over the deterioration of the gas infrastructure in the country.

The problem with the too old gas pipelines must be solved to avoid emergencies and problems with providing gas to households, Alexander Machulin, director general at Promgazenergoservis LLC, said at a meeting of the Russian Chamber of Commerce, local media report.

Russia holds the world’s largest natural gas reserves, according to the U.S. Energy Information Administration (EIA). In 2014, Russia’s dry natural gas production was the second-biggest in the world after the dry natural gas output of the United States.

As of last year, Russia’s natural gas transportation system consisted of around 100,000 miles of high-pressure pipelines and more than 20 underground natural gas storage facilities.

Last year, nearly 90 percent of Russia’s natural gas exports of 7.3 trillion cubic feet were shipped via pipelines to Europe, with customers in Germany, Turkey, Italy and Belarus receiving most of those exports. Europe is also dependent on imports from Russia, and its giant Gazprom. Last year, more than 30 percent of the EU’s gas imports came from Russia. Some countries in Europe, including Finland, the Baltic states and most of southeast Europe, rely almost exclusively on natural gas imports from Russia.

It’s not uncommon for Russia, and Gazprom, to use the dominant gas-provider status to price gas in bilateral deals with European clients according to how friendly a country is to Moscow, which has raised EU competition concerns. Now Gazprom is expected to soon settle the half-decade-old dispute over natural gas pricing, and the resolution could change the way the Russian company does business and lead to lower gas prices for much of Eastern Europe.

By Tsvetana Paraskova for Oilprice.com

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