MOSCOW, May 10 (RIA Novosti) Moscow tries to prevent construction of trans-Caspian gas pipeline bypassing Russia/ Pakistan proposes direct military-technical cooperation to Moscow/ Russia to expand its Arctic economic area/ Suzuki to assembly off road vehicles in Russia/ Spain, France, Germany strengthen their foothold on Russian wine market
Vedomosti
Moscow tries to prevent construction of trans-Caspian gas pipeline bypassing Russia
The trans-Caspian gas pipeline project bypassing Russia does not suit Moscow. If Russian President Vladimir Putin during his visits to Kazakhstan and Turkmenistan manages to persuade his counterparts in those countries to consider an alternative route for delivering Central Asian gas to Europe, Moscow will substantially strengthen its geopolitical positions in the region.
During his first visit to Russia in April 2007, Turkmen President Gurbanguly Berdymukhammedov proposed discussing the trans-Caspian version of Turkmen gas transit with Vladimir Putin. What this means is the construction of a gas pipeline with an annual capacity of 30 billion cu m of gas that will run on the Caspian Sea bed. Gas from the pipeline could then flow via the Baku-Tbilisi-Erzurum pipeline and the Nabucco pipeline to Europe.
The idea of a trans-Caspian gas pipeline was first advanced by the United States back in 1996. Russia is categorically against this project because the proposed pipeline will bypass Russia.
The project does not suit Kazakhstan either, said Farkhat Ilyasov, a consultant with the Imma Group. In late April, Marat Tajin, Kazakhstan's foreign minister, said the republic had refused to participate in the project. According to Ilyasov, Russia would prefer a coastal Caspian route running along the coasts of Turkmenistan, Kazakhstan and Russia.
Most likely, what is planned is not building a new pipeline, but modernizing the existing Central Asian gas transportation system, which has access to Ukraine and then Western Europe, said Valery Nesterov, an analyst with Troika Dialogue, Russia's oldest and largest independent investment company. The actual route and its potential have not been determined yet, the analyst said. He said that Kazakhstan and Turkmenistan were planning to substantially increase their gas production: in 2006-2015, the production of Kazakh commercial gas intended mostly for export will increase by about 2.5 times - from 14.4 billion cu m to 36 billion cu m.
A source in the Russian government confirmed that Moscow was not interested in discussing a pipeline bypassing Russia, therefore the Russian delegation will insist on an alternative route.
Kommersant
Pakistan proposes direct military-technical cooperation to Moscow
By late May, the Pakistani Defense Ministry should decide whether to buy 10 Mi-17 Hip transport helicopters from Russia.
Pakistan also hopes to acquire 36 Chinese J-10 fighters fitted with AL-31FN engines from MMPP Salyut, a leading Russian aircraft engine manufacturer.
Pakistani Prime Minister Shaukat Aziz told Kommersant, a respected daily, in Islamabad that India opposes his country's plans to start direct military-technical cooperation with Moscow and explained the opposition as old fashioned thinking.
As Moscow considers New Delhi to be its traditional strategic partner, it has always supplied dual-purpose equipment, primarily Mil helicopters, to Islamabad.
The Center for Analysis of Strategies and Technologies said Pakistan had received about 50 Mi-8 Hip helicopters and their modified Mi-17 versions following the breakup of the Soviet Union. Most of them are in operation with the Pakistani army.
But Pakistani leaders are now proposing direct military-technical cooperation to Russia.
When asked whether such cooperation was possible, Prime Minister Aziz said Russia is a world power, and that global players should avoid linking their relations with just one country over those of other states.
He said Islamabad had made no comment regarding Indian purchases of French weaponry.
Russia's Federal Service for Military-Technical Cooperation declined to comment on Aziz's statement. However, the government will soon have to decide on the possibility of re-exporting Russian aircraft engines to Pakistan.
Kommersant sources said the J-10 fighter contract, due to be signed by Islamabad and Beijing soon, stipulates their shipment by late 2009.
Gazeta
Russia to expand its Arctic economic area
Russia has a good chance of expanding its continental shelf in the Arctic by 1.2 million sq km beyond the 200-mile economic area. This expansion would be in an effort to increase its potential hydrocarbon resources by the equivalent of at least 9-10 billion metric tons of oil.
To win the bid, Russia will have "to prove scientifically that the Arctic Ocean shelf is an extension of the Siberian continental shelf," said Valery Kaminsky, head of the Russian World Ocean Research Institute (a key think tank of the Nature Ministry and the Academy of Sciences). It is for this purpose that a research team is setting off from Murmansk today.
Around 60 countries along with Russia have made claims to the riches of the Arctic shelf. Norway is Russia's main rival also claiming the disputed 175,000 sq km area near Spitsbergen - for comparison, the total area of the Crimea is around 25,000 sq km.
However, unlike Norway, Russia has not even started the Arctic shelf development. Its only relevant project currently underway is the Shtokman gas and condensate deposit which holds a confirmed reserve of 3,700 billion cu m of natural gas and over 31 million metric tons of gas condensate.
Sevastyan Leibe, a project manager with the independent consulting group 2K Audit - Business Consulting, said the prospected reserves on the Arctic shelf account for one fourth of Russia's total hydrocarbon resources. However, it is unlikely that Russia will be able to develop those rich deposits alone.
Russia may attract China's CNPC to the Arctic shelf development: the Chinese company will provide investment and equipment in exchange for a share of the oil produced. No details have been reported so far except for the news that the agreement on CNPC's participation in the Russian Arctic shelf fields' development is likely to be signed before mid-2007.
Kommersant
Suzuki to assembly off road vehicles in Russia
Japanese automaker Suzuki will build a unique plant in Russia worth $115 million to assemble 50,000 off road automobiles.
A market player said Suzuki would build a plant in St. Petersburg with an initial capacity of 26,000 automobiles and an option to increase it to 50,000.
The construction is to begin in the second half of 2007 on an area of 50-80 hectares (0.19-0.31 square miles) in the Shushary industrial zone in the suburbs of St. Petersburg, where General Motors and Toyota are building their plants.
The $115-million full-cycle plant (welding, painting and assembly) is to be commissioned in 2010-2011. The source said the plant would most likely be aimed at producing vehicles for export.
Taken together, this makes the Suzuki project unique for Russia, as no other foreign manufacturer has assembled 4WD automobiles here before. Toyota and Volkswagen said they might export their cars assembled in Russia and increase the annual capacity of their plants to 200,000 and 115,000, respectively.
Experts have not been surprised by Suzuki's plans. Sergei Roshchupkin, head of the group of companies SIM, which became Suzuki's official dealer in Russia in 1998, said the Japanese concern was most successful on the Russian market for off road automobiles.
Experts said Suzuki would most likely export the new plant's vehicles, because demand for Suzuki automobiles is low in Russia. Suzuki ranks 13th in terms of sales, with only 16,000 cars sold here annually.
Alexander Agibalov, managing director of the AG Capital investment group, said Suzuki might export the assembled 4WD cars in Russia to third countries. He added that a relatively modest initial capacity (26,000) reduces the risk of overstocking.
Novye Izvestia
Spain, France, Germany strengthen their foothold on Russian wine market
A year ago, Russia's consumer rights watchdog, Rospotrebnadzor, prohibited the import of wines from Moldova and Georgia, hinting that it would also scrutinize wines from other countries, including Western Europe and South America.
Imports of Moldovan wine are expected to resume soon, although in different amounts and at new prices. The Russian wine market has changed dramatically over the past year, and Moldovans will have to work very hard to regain their positions on it.
Spain is now a leader on the Russian wine market (21.8%). Analyst Sergei Trofimov said that Spain, which exports well known wines at high prices, according to Moscow standards, has started supplying Russia with relatively cheap table wines of an acceptable quality. This allowed it to take over a substantial part of the market vacated by Moldovan and Georgian wines in terms of the price-quality factor.
The runners-up are France (15.9%) and Germany (14.9%), which promptly responded to changes by offering reasonably priced wines of good quality. The remaining two leaders are Italy (6.6%) and Chile (5.7%).
According to Russia's National Alcohol Association, the import of hard liquor has grown substantially this year (by 26%), and the majority of it comes from Ukraine (38.4%), France (15.4%), Azerbaijan (10.4%), Britain (9.5%) and Armenia (8.3%).
The import of beer skyrocketed by 78% (72 million liters worth $36 million), with Ukraine leading the race (72.8%), whereas traditional beer empires, Germany and the Czech Republic, account for only 4.8% and 4.6%, respectfully.
Experts said Ukrainian beer was several times cheaper than the products from German or Czech breweries, which now have factories brewing their top brands in Russia. Only beer snobs know original drink from Dusseldorf or Ceske Budejovice.
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