ECONOMY

Putin seeks gas deals

Energy issues will figure prominently in the talks Russian President Vladimir Putin will have with Prime Minister Costas Simitis and other Greek officials during his visit tomorrow and Friday. Russia is Greece’s chief supplier of natural gas and the two countries are also eager to expand gas and oil trade. Cooperation between Greece and Russia in the energy sector dates to the 1970s, when Russian companies build the Public Power Corporation’s electricity-generating plants. In the late 1980s, the two countries signed the agreement by which Russia became Greece’s first supplier of natural gas. In 1991, Gazexport, a subsidiary of Russian gas giant Gazprom, and the Kopelouzos Group formed a joint venture, Prometheus Gas, which imports the gas by pipeline through Ukraine, Moldova, Romania and Bulgaria. Shortly afterward, talks began about the possibility of transporting Caspian oil via a pipeline from the Bulgarian port of Burgas to the northern Greek port of Alexandroupolis, thereby bypassing the Bosphorus straits. The deregulation of Greece’s energy market, which will also include the natural gas sector, provides an opportunity for the further development of Greek-Russian economic relations. Russia’s two biggest oil companies, Lukoil and Yukos, have also shown an interest in acquiring a 30-percent stake in Hellenic Petroleum. Lukoil has formed a joint venture with Latsis Group company Petrola for the purpose. Simitis and Putin will certainly discuss the issues raised above, especially the prospect of expanding Greek imports of natural gas. Having resolved the issue of pricing, where disagreements threatened to bring the case to international arbitration, a few months ago, the two governments recently discussed the possibility of further imports of Russian natural gas during a recent visit by Russia’s Deputy Prime Minister Valentina Matvienko, a former ambassador to Greece. Greece wants to import an extra 1 billion cubic meters of natural gas annually and wants Russia to undertake to build more pipelines. A difference between the two sides is that Russians want the extra natural gas to be delivered through Prometheus Gas as well, while the Greek government balks at Gazexport’s agreement with Prometheus. It is possible, but as yet unconfirmed, that new Gazprom chief executive A.B. Miller will arrive with Putin. If so, this will augur well for an agreement. The Russian side will also express an interest in participating in municipal gas networks and acquiring a stake in state-controlled Public Gas Corporation (DEPA), which has the monopoly of distribution to the municipal networks.