MOSCOW, December 27 (RIA Novosti) Iran to protect its nuclear facilities with Russian rockets / Medvedev has no rivals in presidential race / ExxonMobil may share Shell and TNK-BP's bad luck in Russia / Russia unruffled by Kazakhstan's uranium plans / Murmansk terminal needs nearby deposits to become profitable / VSMPO-AVISMA to supply over $1 billion worth of titanium to Boeing
Vremya Novostei, Izvestia
Iran to protect its nuclear facilities with Russian rockets
Russia's ambition to become an independent center of global influence seems to be prevailing over the costs of cooperation with rogue political regimes. News broke on Wednesday that Russia was ready to supply S-300 surface-to-air missile systems to Iran.
Together with 29 Tor-M1 short-range systems earlier supplied, they will protect the nuclear power plant being built at Bushehr. An appropriate treaty has already been initialed, although no final political decision has been taken.
Perhaps delivering the systems, able to destroy a range of air targets, to Iran will be Moscow's trump card in its drive against the third stage of U.S. missile defenses in Poland and the Czech Republic. And another argument to persuade the next American administration not to go to war against that country.
The Tor-M1 (with a range of 12-14 kilometers) is equally effective against aircraft, cruise missiles and unmanned aerial vehicles. It is, however, a close-battle weapon, the last defense line that engages or finishes off the targets which get through S-300s.
The purchase of such a system would enable Tehran to have a credible modern multi-echelon air defense system covering any key strategic facility.
Russian weapons dealers admit that on the arms market, "Iran is a client sought both overtly and covertly."
"We are meeting strong competition there. We do not want to leave this market, because to re-enter it later would be very difficult," Mikhail Dmitriyev, director of the Federal Service for Military Technical Cooperation, said recently.
One of the high-placed executives of Russia's defense industry has said that the agreement to supply 30 to 40 S-300s has been initialed on one hand by the Federal Service for Military Technical Cooperation and, on the other, by the Iranian military establishment.
The preliminary information about the agreement was most likely "injected" especially to probe the response of interested parties. Should the situation worsen or there be threat of sanctions, it might all go no further the initialing of the deal.
For Russia, according to Ruslan Pukhov, director of the Center for Analysis of Strategies and Technologies, the agreement to supply S-300s means that the well-known Gore-Chernomyrdin memo has been just thrown into the waste-paper basket.
It was signed in 1996 when Boris Yeltsin, seeking a second term as president, needed U.S. support and promised not to supply arms to Tehran.
With the present agreement, "we have stopped hanging upon Washington's every word," the Center's director said.
Gazeta.ru, Novye Izvestia
Medvedev has no rivals in presidential race
First Deputy Prime Minister Dmitry Medvedev is the most probable candidate for the Russian presidency. If the elections were held next Sunday, more people would vote for him (79%) than voted for Vladimir Putin in 2004 (71.3%).
The poll was held by the Levada Center on December 21-25 among 1,600 Russians aged above 18 years (margin of error 3%). The figures show the percentage of those who said they would take part in the elections and had chosen their candidate.
Levada expert Leonid Sedov said Medvedev was likely to get approximately 79% at the elections, just as the poll showed.
"We can assure you that these are real figures, as proved by the example of the December parliamentary elections, whose results were the same as our forecast," he told Gazeta.ru. "We will have even more reliable information a week before the elections, but we don't expect the figures to change much, especially given the current group of contenders."
Another Levada survey provided similar results. According to it, 40% of respondents believe the democratic parties will not agree to support one candidate, and none of the democratic candidates received more than 5% of the potential vote. Boris Nemtsov, nominated by the Union of Right Forces (SPS), received only 2.5% and has withdrawn from the race.
A quarter of those polled told the Levada Center that democratic parties should not nominate a common candidate, but should instead support Putin's nominee.
Dmitry Badovsky, deputy director of the Research Institute of Social Systems, said: "The fact that the outcome of the elections seems predetermined is demobilizing the electorate of the opposition candidates. Other candidates are acting according to the Olympic principle: participation is more important than victory. This is having a negative influence on their supporters."
Vedomosti
ExxonMobil may share Shell and TNK-BP's bad luck in Russia
It is quite possible that US-based ExxonMobil, a foreign operator in the Sakhalin-1 oil and gas project in Russia's Far East, will share the bad luck of Shell and TNK-BP, the other foreign partners in the project, and cede, under pressure from the authorities, its 30% stake in this large and complicated project to Gazprom.
Alexander Ananenkov, deputy chairman of Gazprom's Management Committee, is convinced that foreign participation in the project has led to a "direct encroachment on Russia's national interests, the transfer of control over the projects to foreign companies, and attempts to sidestep Russian gas consumers in the Far East, depriving them of gas which belongs to them by right." Vedomosti failed to contact Ananenkov on December 26.
At present, gas from the Sakhalin-1 project is supplied to the Khabarovsk Region. However, last year ExxonMobil signed an agreement with the China National Petroleum Corporation (CNPC) on gas supplies to China, which irritated Gazprom as it also had plans to sell gas to China. Ananenkov said last week that the Russian government would ban commercial natural gas production in the Sakhalin-1 project if its participants did not agree to sell all their output to Gazprom for sale on the domestic market.
The statements made recently show clearly that the Russian natural gas monopoly Gazprom wants to gain control over the Sakhalin-1 project and that talk about Russian consumers in the Far East is nothing but a cover, said Mikhail Korchemkin, director of the East European Gas Analysis consultancy.
Gazprom negotiated its entry into Sakhalin-1 with Rosneft and Exxon, but failed to reach an agreement with them, said a source close to the Gazprom management. A source in the government said that the government received instructions from the Presidential Executive Office "to consider the expediency of foreign investors' participation in the production sharing agreements (PSA)" in general. The final decision has not been drafted yet, he said.
The Presidential Executive Office denies the existence of such instructions. A PSA can be cancelled unilaterally only when there are serious violations on the part of the investors, such as harm to the environment or ungrounded increase in the cost of the project, said a source at the Russian Industry and Energy Ministry. However, this must be proved in court. A PSA can also be revoked by mutual agreement of the parties but only on the terms and conditions beneficial for all participants in the project. The source also said that Gazprom had not submitted any proposal to the ministry to change the PSA terms.
Nezavisimaya Gazeta
Russia unruffled by Kazakhstan's uranium plans
Kazakhstan's National Atomic Company (Kazatomprom) agreed on Wednesday with Kansai Electric Power, Nuclear Fuel Industries and Sumitomo Corporation to recondition Japanese spent nuclear fuel and off-grade uranium. The reconditioned secondary uranium will go back to Japan.
Russian companies do not think these agreements pose a threat to Russia's interests, which also claims to be a processor of spent nuclear fuel.
For Kazakhstan, the agreements mean increased deliveries of nuclear fuel to a forward-looking Japanese market. Kazatomprom seeks to become a vertically integrated company, and not just a natural uranium supplier.
The agreement with Japan will help to set up one more conversion stage at the Soviet-era Ulbinsky metallurgical plant, which was previously unavailable in Kazakhstan, company experts said.
Kazakhstan has 19%, or 1.5 million metric tons, of the world's proven uranium resources. By 2010, Kazakhstan plans to be exporting 15,000 metric tons of uranium to the world market.
"Spent nuclear fuel contains a good deal of 'good' uranium, which can be utilized again after removing 'bad' fission products. The Japanese have long been looking for a place where they could regenerate their fuel," Russian analysts said.
Kazakhstan's technology has not ruffled Russia yet, because having no enrichment facilities of their own, the Kazakhs will have to use Russian equipment at an international enrichment center in Russia's Angarsk to recondition Japanese uranium.
"The world nuclear industry is mainly short of uranium enrichment capacities and uranium natural resources, while fuel manufacturing plants are today in surplus and will remain under-used even in the best-case scenarios as far as construction of new nuclear plants is concerned," nuclear experts said.
Kommersant
Murmansk terminal needs nearby deposits to become profitable
The Murmansk port management company, which is currently implementing $6 billion worth of projects in the port, yesterday held a constituent meeting. Experts believe that the new oil terminal in the port, with a capacity of 35 million metric tons (257.25 million bbl), will have enough raw materials only if the nearby offshore fields are developed.
The development program for the Murmansk port in the north of European Russia, approved by the Transport Ministry, stipulates investment projects worth 157 billion rubles ($6.36 billion), including 60.9 billion rubles to be allocated for railway projects from the federal budget and the Investment Fund and by rail monopoly Russian Railways.
Other projects - the oil terminal (46 billion rubles), coal terminals (14.4 billion rubles) and a container terminal (10.9 billion rubles) - are to be financed by private investors.
Private stevedoring company Murmansk Commercial Seaport holds the largest stake in the port project, 40%. Russian Railways holds a 25% stake, oil producer Rosneft and the Rosmorport state-owned seaport company 15% each, and the Murmansk Region administration 5%. It is not clear if the investments will be divided proportionately among shareholders.
Nadezhda Malysheva, chief editor of the PortNews news and analytical agency, said the participation of Rosneft looks strange, because the oil company does not need onshore transshipment facilities as it has a floating terminal, Belokamenka, with a capacity of 300,000 metric tons (2.2 million bbl) nearby.
A source in Rosneft confirmed that the company does not need the port's facilities because Belokamenka handled 4.1 million metric tons (30.14 million bbl) of oil last year, including 2.8 million metric tons (20.58 million bbl) supplied by Rosneft.
The new terminal is scheduled to reach the designed capacity 12 years and six months after the beginning of construction.
Mikhail Perfilov, director for development at Argus Media, said: "The terminal will be profitable only with the development of the nearby Arctic offshore and onshore deposits, and then only if these projects' operators agree to use it."
He was referring to Gazprom's Prirazlomnoye oilfield and Shtokman gas condensate field. The Shtokman field is to be commissioned only in 2013, and Prirazlomnoye no sooner than in 2009.
However, a source in Gazprom Neft, an oil arm of the gas monopoly and the future operator of Gazprom's oilfields, said that Prirazlomnoye would be placed under management only in 2010.
Vedomosti
VSMPO-AVISMA to supply over $1 billion worth of titanium to Boeing
On December 27, Russia's VSMPO-AVISMA and US-based Boeing will sign a contract on supplies of titanium products. According to three sources close to VSMPO-AVISMA and its owner, the Rostekhnologii defence industry corporation, the five-year contract (2012-2017) will amount to $1.2-$1.3 billion. A spokesman from the Russian subdivision of Boeing confirmed the company's plans to sign the contract but refused to comment.
VSMPO-AVISMA and Boeing signed their first contract for titanium supplies in 1994. Until 2006, Boeing had bought only titanium ingots and then pressed parts from them. VSMPO-AVISMA and Boeing have since set up a joint venture to produce both semi-finished components and parts.
A source close to VSMPO-AVISMA said the share of finished products in the new contract is considerable. These products are about 30% more expensive than ingots, said Boris Rybak, Infomost's director general. Titanium alloys are used to manufacture the primary structural elements of the airframe and landing gear, he said.
Titanium accounts for 15% of the production costs of the new Boeing model, B787 Dreamliner. Boeing currently has orders for 317 such airliners.
VSMPO-AVISMA is the world's largest titanium producer. In 2006, the company produced 23,900 metric tons of titanium products; the projected figure for 2007 is 27,200 metric tons. The company's earnings (calculated to Russian Accounting Standards) over the first nine months of this year amounted to 20.9 billion rubles ($846.15 million), and net profit to 3.77 billion rubles ($152.63 million). A 66% stake in the company is held by Oboronimpex, a Rostekhnologii subsidiary, and 4% belongs to Vladislav Tetyukhin, VSMPO-AVISMA's director general. The company's capitalization in the Russian Trading System (RTS) is $3.5 billion.
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